DEF 14A 1 val-2020xdef14a.htm DEF 14A Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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val.jpg
 
Valaris plc
110 Cannon Street
London, EC4N 6EU
Phone: +44 (0) 20 7659 4660
www.valaris.com
Company No. 7023598
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
to be held on 15 June 2020
The Annual General Meeting of Shareholders of Valaris plc ("Valaris," "we," "us," "our" or the "Company") will be held at 110 Cannon Street, London EC4N 6EU, United Kingdom, at 12:00 p.m. London time, on 15 June 2020 (the "Meeting").
Impact of Coronavirus (COVID-19) on the Meeting
The Company is closely monitoring developments relating to the current outbreak of COVID-19, including the related public health guidance and legislation issued by the UK Government.
At the time of publication of this Notice, the UK Government has prohibited public gatherings of more than two people and non-essential travel, save in certain limited circumstances.
In light of these measures, the Meeting this year will be run as a closed meeting and shareholders will not be able to attend in person. The Company will make arrangements such that the legal requirements to hold the Meeting can be satisfied through the attendance of a minimum number of people and the format of the Meeting will be purely functional.
Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the Meeting. Details on how to submit your proxy vote are set out on page 9 of the accompanying proxy statement. Given the current restrictions on attendance, shareholders are encouraged to appoint the chair of the Meeting as their proxy rather than a named person who will not be permitted to attend the Meeting.
This situation is constantly evolving, and the UK Government may change current restrictions or implement further measures relating to the holding of general meetings during the affected period. Any changes to the Meeting (including any change to the location of the Meeting) will be communicated to shareholders before the meeting through our website at www.valaris.com and, where appropriate, by filings with the Securities & Exchange Commission (the "SEC").                                 
Details of the items of business to be proposed at the meeting are set out below. Resolutions 11 and 12 will be proposed as special resolutions. All other resolutions will be proposed as ordinary resolutions
ORDINARY RESOLUTIONS
1.
To re-elect, by way of separate ordinary resolutions, the ten directors named in the section headed "Resolution 1" of the accompanying proxy statement to serve until the 2021 Annual General Meeting of Shareholders.
2.
To ratify the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31 December 2020.
3.
To appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006 (the "Companies Act") (to hold office from the conclusion of the Meeting until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company).
4.
To authorise the Audit Committee to determine our U.K. statutory auditors' remuneration.
5.
To approve an amendment to the 2018 Long-Term Incentive Plan.
6.
To approve the Directors' Remuneration Policy.
7.
To cast a non-binding advisory vote to approve the Directors' Remuneration Report for the year ended 31 December 2019 (excluding the Directors' Remuneration Policy).
8.
To cast a non-binding advisory vote to approve the compensation of our named executive officers.
9.
To cast a non-binding advisory vote to approve the reports of the auditors and the directors and the U.K. statutory accounts for the year ended 31 December 2019.




10.
To authorise the Board of Directors to allot shares, the full text of which can be found in "Resolution 10" of the accompanying proxy statement.
SPECIAL RESOLUTIONS
11.
To approve the general disapplication of pre-emption rights, the full text of which can be found in "Resolution 11" of the accompanying proxy statement.
12.
To approve the disapplication of pre-emption rights in connection with an acquisition or specified capital investment, the full text of which can be found in "Resolution 12" of the accompanying proxy statement.
Resolutions 1 through 10 will be proposed as ordinary resolutions, which means, assuming a quorum is present, each of Resolutions 1 through 10 will be approved if a simple majority of the votes cast are cast in favour thereof. Resolutions 11 and 12 will be proposed as special resolutions, which means, assuming a quorum is present, each of Resolutions 11 and 12 will be approved if at least 75% of the votes cast are cast in favour thereof.
With respect to the non-binding, advisory votes on Resolutions 7, 8 and 9, regarding (respectively) the Directors' Remuneration Report, the compensation of our named executive officers, and the U.K. statutory reports and accounts, the result of the vote will not require the Board of Directors or any committee thereof to take any action. However, our Board of Directors values the opinions of our shareholders as expressed through their advisory votes on such non-binding resolutions and other communications. Accordingly, the Board of Directors will carefully consider the outcome of the advisory votes on Resolutions 7, 8 and 9.
Please review the proxy statement accompanying this notice for more complete information regarding the Meeting and the full text of the resolutions to be proposed at the Meeting.
By Order of the Board of Directors,
michaelmcguintyblksiga12.jpg
Michael T. McGuinty
Senior Vice President, General Counsel and Secretary

27 April 2020

YOUR VOTE IS IMPORTANT. IN LIGHT OF UK GOVERNMENT MEASURES IN FORCE AT THE TIME OF PUBLICATION OF THIS NOTICE, SUBJECT TO ANY CONTRARY ANNOUNCEMENT BY - OR COMMUNICATION TO SHAREHOLDERS FROM - THE COMPANY, THE MEETING THIS YEAR WILL BE HELD AS A CLOSED MEETING AND SHAREHOLDERS WILL NOTE BE ABLE TO ATTEND IN PERSON. FOR SPECIFIC INSTRUCTIONS ON VOTING, PLEASE REFER TO THE INSTRUCTIONS INCLUDED WITH THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS OR THE PROXY CARD INCLUDED WITH THE PROXY MATERIALS.




TABLE OF CONTENTS

RESOLUTION 2, 3 AND 4
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON 16 JUNE 2020
 





PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. For more complete information regarding our 2019 fiscal performance, please review our annual report on Form 10-K for the period ended 31 December 2019. This proxy statement, our 2019 annual report and a proxy card are first being sent or distributed to shareholders on or about 6 May 2020.
2020 Annual General Meeting of Shareholders    

Time and Date:        12:00 p.m. London time
Place:            110 Cannon Street London EC4N 6EU
Meeting Date:        15 June 2020
Record Date:        23 March 2020
Voting Cutoff Date:    3:00 p.m. Eastern Time on 12 June 2020
11:59 p.m. Eastern Time on 9 June 2020 for shares held in the Company's Savings Plan
In response to the ongoing outbreak of COVID-19, the UK Government has prohibited public gatherings of more than two people. Subject to any contrary announcement by - or communication to shareholders from - the Company, the Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person. Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the Meeting. Details on how to submit your proxy vote are set out on page 9. Given the current restrictions on attendance, shareholders are encouraged to appoint the chair of the meeting as their proxy rather than a named person who will not be permitted to attend the Meeting. We have designated the following persons as proxies for the Meeting: Thomas P. Burke, Michael T. McGuinty and the Chair of the Meeting.
Voting Matters and Board Recommendations     

Re-election of Directors
FOR each Nominee 
Ratify KPMG LLP (U.S.) as U.S. Independent Auditors
FOR
Appoint KPMG LLP (U.K.) as U.K. Statutory Auditors
FOR
Authorise the U.K. Statutory Auditors' Remuneration
FOR
Approve the Amendment to the 2018 Long-Term Incentive Plan
FOR
Approve the Directors' Remuneration Policy
FOR
Advisory Vote to Approve the Directors' Remuneration Report
FOR
Advisory Vote to Approve Named Executive Officer Compensation
FOR
Advisory Vote to Approve the U.K. Statutory Accounts
FOR
Authorise the Board of Directors to Allot Shares
FOR
Special Resolution to Approve the General Disapplication of Pre-emption Rights
FOR
Special Resolution to Approve the Disapplication of Pre-emption Rights in Connection with an Acquisition or Specified Capital Investment
FOR

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Board Nominees

Name
Age
Director Since
Principal Occupation
Independent (Yes/No)
 
 
 
 
 
William E. Albrecht
68
2019
Non-Executive Chairman of the Board of California Resources Corporation

Yes
Frederick Arnold
66
2019
Former Financial Executive (Retired)
Yes
Thomas P. Burke
52
2019
President and Chief Executive Officer of Valaris plc
No
Mary E. Francis CBE
71
2013
Former Senior Civil Servant in British Treasury and Prime Minister's Office (Retired)
Yes
Georges J. Lambert
42
2019
Former Partner and Senior Vice President of The Capital Group (Retired)
Yes
Suzanne P. Nimocks
61
2019
Former Senior Partner of McKinsey & Company (Retired)
Yes
Thierry Pilenko
62
2019
Former Executive Chairman of TechnipFMC plc (Retired)
Yes
Paul E. Rowsey, III
65
2000
Former Chief Executive Officer of Compatriot Capital, Inc. (Retired)
Yes
Charles L. Szews
63
2019
Former Chief Executive Officer of Oshkosh Corporation (Retired)
Yes
Adam Weitzman
35
2020
Partner of Luminus Management LLC
Yes

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Board Refreshment and Enhanced Governance

Since our last annual general meeting of shareholders, Valaris has proactively engaged with shareholders, refreshed the Board and enhanced governance. Our recent Board refreshment and governance enhancement efforts include:
Two of our longer tenured directors retired from our Board in November 2019;
The Board appointed two new independent directors, Messrs. Arnold and Lambert, with expertise in capital markets, finance and corporate governance in November 2019;
The Board formed the Finance Committee to assist in its oversight of the Company’s capital structure and financial strategies;
In January 2020, the Board added a third new independent director, Adam Weitzman, who is also a representative from our largest shareholder at the time of his appointment;
Mr. Trowell will step down as Executive Chairman at the end of the day on 30 April 2020, and not stand for re-election at the Meeting;
Another director, Keith O. Rattie, will retire and not stand for re-election at the Meeting, and the size of the Board will decrease to 10 directors;
Mr. Rowsey will be appointed as our non-executive Chairman and will assume the duties of the Independent Lead Director upon Mr. Trowell's stepping down as Executive Chairman; and
The Board refreshment has reduced the average age and tenure of our Board and augmented the Board’s expertise in equity and debt capital markets and corporate governance.
Executive Compensation Philosophy    

Our executive compensation philosophy is based on the promotion of the following principles:
strong financial performance;
creation of and preservation of a strong balance sheet;
industry leading safety performance;
operational efficiency (downtime reduction and safety);
customer satisfaction;
positioning assets in markets that offer prospects for long-term growth in profitability;
creation of long-term value; and
strategic and opportunistic enhancement of our rig fleet.
We stress the importance of these principles through the structure of our executive compensation programme by placing the majority of executive pay at risk and subjecting a significant portion of each NEO's potential compensation to specific near-term and long-term performance requirements.
Allotment of Shares
Under the Companies Act, we cannot issue new shares (other than in certain limited circumstances) without first obtaining approval from our shareholders. The Companies Act provides that this approval grants authority to the Board to allot shares in the Company and to grant rights to subscribe for or convert any security of the Company into shares of the Company. Without the grant of authority from shareholders described in Resolution 10, the Board would be unable to issue any new shares without obtaining specific prior approval from our shareholders. Prior shareholder authorisation for the issue of new shares is required as a matter of U.K. law and it is customary for public limited companies incorporated under the laws of England and Wales to seek a general authority to issue new shares on an annual basis.

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Disapplication of Pre-emption Rights
Under the Companies Act, our shareholders have pre-emption rights to subscribe for any ordinary shares we issue for cash in proportion to their existing shareholdings, which means we must offer shareholders the right to purchase any shares we intend to issue for cash. Our proposed Resolutions 11 and 12 would give the Directors the power to issue ordinary shares (or sell any ordinary shares which the Company elects to hold in treasury) for cash without first offering them to existing shareholders. Approval of these Resolutions would provide the Directors with flexibility to pursue strategic transactions, raise capital and finance growth with equity. Prior shareholder authorisation for the issue of new shares for cash on a non-pre-emptive basis is required as a matter of U.K. law and it is customary for public limited companies incorporated under the laws of England and Wales to seek a general authority to disapply pre-emption rights and an authority to disapply pre-emption rights in connection with an acquisition or specified capital investment on an annual basis.

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QUESTIONS AND ANSWERS ABOUT 
THE MEETING AND VOTING
1.   Can I attend the meeting in person?

No, subject to any further announcement by - or shareholder communication from - the Company. In response to the ongoing outbreak of COVID-19, the UK Government has prohibited public gatherings of more than two people. The Meeting this year will therefore be held as a closed meeting and shareholders will not be able to attend in person. Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the Meeting. Details on how to submit your proxy vote are set out on page 9. Given the current restrictions on attendance, shareholders are encouraged to appoint the chair of the Meeting as their proxy rather than a named person who will not be permitted to attend the Meeting. We have designated the following persons as proxies for the Meeting: Thomas P. Burke, Michael T. McGuinty and the Chair of the Meeting.
2. What is a proxy statement and what is a proxy?

A proxy statement is a document that the U.S. Securities and Exchange Commission ("SEC") regulations require us to give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy is your legal designation of another person to vote the shares you own. The person designated is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. Given the current restrictions on attendance, shareholders are encouraged to appoint the chair of the Meeting as their proxy rather than a named person who will not be permitted to attend the Meeting. We have designated the following persons as proxies for the Meeting: Thomas P. Burke, Michael T. McGuinty and the Chair of the Meeting.
3.   Why did I receive these proxy materials?

We are providing this meeting notice, proxy statement, proxy card and 2019 annual report and U.K. statutory accounts (the "proxy materials") in connection with the solicitation by our Board of proxies to be voted at our Meeting. The proxies also may be voted at any continuations, adjournments or postponements of the Meeting. This proxy statement contains information you may use when deciding how to vote in connection with the Meeting. All shareholders as of the close of business on 23 March 2020 are entitled to receive notice of, attend and vote at the Meeting or, subject to our Articles of Association, any adjournment or postponement of the Meeting. See instructions set forth in Question 17 below. A list of all shareholders of record entitled to vote at the Meeting will be on file at our principal executive offices, 110 Cannon Street, London, EC4N 6EU, United Kingdom, and will be available for inspection at the Meeting. Changes to entries on the register after this time will be disregarded in determining the rights of any person to attend or vote at the Meeting.
4.   Why did I receive a Notice of Internet Availability of Proxy Materials instead of printed proxy materials?

Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. We encourage you to take advantage of the availability of the proxy materials on the Internet in order to help reduce the costs and environmental impact of the Meeting.
5. Why did I not receive the Notice by mail or e-mail?


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If you elected to receive proxy materials by mail or e-mail for any of your holdings in the past, you were automatically enrolled using the same process for all your holdings this year. If you would like to change the method of delivery, please follow the instructions set forth in the answer to Question 7.
6. How can I access the proxy materials over the Internet?
Pursuant to rules adopted by the SEC, we provide shareholders access to our proxy materials for the Meeting over the Internet. The proxy materials for the Meeting are available at www.proxyvote.com. To access these materials and to vote, follow the instructions shown on the proxy card, voting instruction card from your broker or the Notice.
7. Can I get paper copies of the proxy materials?

You may request paper copies of the proxy materials, including our 2019 annual report and U.K. statutory accounts, by calling 1-800-579-1639 or e-mailing sendmaterial@proxyvote.com. You also may request paper copies when prompted at www.proxyvote.com.
8. Can I choose the method in which I receive future proxy materials?

There are three methods in which shareholders of record and beneficial owners may receive future proxy materials or notice thereof:
Notice and Access: The Company furnishes proxy materials over the Internet and mails the Notice to most shareholders.
E-mail: If you would like to have earlier access to future proxy materials and reduce our costs of printing and delivering the proxy materials, you can instruct us to send all future proxy materials to you via e-mail. If you request future proxy materials via e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials via e-mail will remain in effect until you change it. If you wish to receive all future materials electronically, please visit www.investordelivery.com to enroll or, if voting electronically at www.proxyvote.com, follow the instructions to enroll for electronic delivery after you vote.
Mail: You may request distribution of paper copies of future proxy materials by mail by calling 1-800-579-1639 or e-mailing sendmaterial@proxyvote.com. If you are voting electronically at www.proxyvote.com, follow the instructions to enroll for paper copies by mail after you vote.
If you are a beneficial owner, you should consult the directions provided by your broker, bank, trust or other nominee with respect to how you receive your proxy materials and how to vote your shares.
If there are multiple shareholders residing at the same address, we will send one set of proxy materials per household. However, you may inform us as to whether you wish to receive one set of proxy materials per household or one set of proxy materials per person in the future by calling or emailing as set forth above.

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9. Can I vote my shares by completing and returning the Notice?

No, the Notice simply instructs you on how to vote. To vote your shares, see instructions set forth in Question 17 below.
10.   When and where is the Meeting and who may attend?

The Meeting will be held on 15 June 2020 at 12:00 p.m. London time at 110 Cannon Street, London, EC4N 6EU, United Kingdom. In response to the ongoing outbreak of COVID-19, the UK Government has prohibited public gatherings of more than two people. Subject to any further announcement by - or shareholder communication from - the Company, the Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person.
11.   What is the difference between holding shares as a shareholder of record and as a beneficial owner?

If your shares are registered in your name on the books and records of Computershare Trust Company, N.A., our transfer agent, you are a "shareholder of record." Accordingly, we sent the Notice directly to you.
If your shares are held for you in the name of your broker, bank, trust or other nominee as custodian, your shares are held in "street name," and you are considered the "beneficial owner." Either the Notice or the proxy materials have been, or will be, forwarded to you by your broker, bank, trust or other holder of record, who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, trust or other nominee on how to vote your shares by using the voting instruction card included in the mailing.
12.   What are my voting choices for each of the resolutions to be voted on at the Meeting?

You may vote "for" or "against" or you may elect to "abstain" with respect to each resolution. We have majority voting for the election of directors. Under our Articles of Association, when a quorum is present, a nominee seeking election to a directorship shall be elected if a majority of the votes cast are cast in favour of the resolution to elect or re-elect the director.
Resolutions 1 through 10 will be proposed as ordinary resolutions, which means, assuming a quorum is present, each of Resolutions 1 through 10 will be approved if a majority of the votes cast are cast in favour thereof. Resolutions 11 and 12 will be proposed as special resolutions, which means, assuming a quorum is present, each of Resolutions 11 and 12 will be approved if at least 75% of the votes cast are cast in favour thereof. With respect to the non-binding advisory votes on Resolutions 7, 8 and 9, the result of the vote will not require our Board or any committee thereof to take any action. However, our Board values the opinions of our shareholders as expressed through their advisory votes on such non-binding resolutions and other communications. Accordingly, our Board will carefully consider the outcome of the advisory votes on Resolutions 7, 8 and 9.

7



13. What are our Board's recommendations on how I should vote my shares?
Our Board recommends that you vote your shares as follows:
Resolution 1a. - 1j.
FOR each of the ordinary resolutions to re-elect the ten Directors of the Company named in the section headed “Resolution 1” of this proxy statement.
Resolution 2
FOR the ordinary resolution to ratify the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31 December 2019.
Resolution 3
FOR the ordinary resolution to appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the Companies Act.
Resolution 4
FOR the ordinary resolution to authorise the Audit Committee to determine our U.K. statutory auditors' remuneration.
Resolution 5
FOR the ordinary resolution to approve an amendment to the 2018 Long-Term Incentive Plan.
Resolution 6
FOR the ordinary resolution to approve the Directors' Remuneration Policy.
Resolution 7
FOR the non-binding advisory vote to approve the Directors' Remuneration Report for the year ended 31 December 2019.
Resolution 8
FOR the non-binding advisory vote to approve the compensation of our named executive officers.
Resolution 9
FOR the non-binding advisory vote to approve the reports of the auditors and the directors and the U.K. statutory accounts for the year ended 31 December 2019.
Resolution 10
FOR the ordinary resolution to authorise the Board to allot shares.
Resolution 11
FOR the special resolution to approve the general disapplication of pre-emption rights.
Resolution 12
FOR the special resolution to approve the disapplication of pre-emption rights in connection with an acquisition or specified capital investment.

All of the nominees named in Resolutions 1a.-1j. have indicated that they will be willing and able to serve as directors. If any nominee becomes unwilling or unable to serve as a director, the Board may propose another person in place of that nominee, and the individuals designated as your proxies will vote to elect that proposed person. Alternatively, the Board may decide, as appropriate, to reduce the number of directors constituting the full Board.
14.   Are there any other matters to be acted upon at the Meeting?

We do not know of any other matters to be presented or acted upon at the Meeting. If any matters not set forth in the Meeting notice included in the proxy materials are properly brought before the Meeting, the persons named in the accompanying proxy will have discretionary authority to vote on them in accordance with their best judgement.
15.   Who is entitled to vote at the Meeting?

You are entitled to vote if you owned shares as of the close of business on the record date, 23 March 2020. If you are a beneficial owner of Company shares, you must have a legal proxy from the shareholder of record to vote your shares at the Meeting. Each share is entitled to one vote, and there is no cumulative voting.
As of 23 March 2020, we had 198,419,838 shares outstanding. Governing laws as well as our governance documents require our Board to establish a record date in order to determine who is entitled to receive notice of, attend and vote at the Meeting and any continuations, adjournments or postponements thereof. In accordance with the Company's Articles of Association, voting on all resolutions will be conducted on a poll and not on a show of hands.

8



16.   What is the quorum required to hold the Meeting? What are the effects of abstentions and broker non-votes at the Meeting?

For purposes of the Meeting, shareholders present in person or by proxy who represent at least a majority of shares entitled to vote at the Meeting will constitute a quorum. Abstentions and shares held by a broker or its nominee that are voted on any matter are included in determining the number of votes present or represented at the Meeting and are counted for quorum purposes.
An abstention occurs when a shareholder abstains from voting (either in person or by proxy) on one or more of the proposals. Broker non-votes occur on resolutions considered by the NYSE to be "non-routine" because a broker returns a proxy but does not have authority to vote on such resolutions on behalf of a beneficial owner who has not submitted a voting instruction form. The "non-routine" items in this proxy statement are Resolutions 1, 5, 6, 7, 8, 9 and 12; the other resolutions in this proxy statement are "routine" items for which a broker has authority under NYSE rules to vote shares, even if the broker does not receive a voting instruction form from the beneficial owner of the shares. In determining the number of votes cast for the Resolutions in this proxy statement, broker non-votes do not count as votes cast, and therefore have no effect on vote outcomes. Abstentions count as votes cast only for Resolution 5, which requires shareholder approval under NYSE rules. For resolution 5, an abstention has the practical effect of a vote against the Resolution. For all other Resolutions, abstentions do not count as votes cast, and therefore do not affect the vote outcome.
17.   How do I vote?

Shareholders of Record: Subject to any further announcement by - or shareholder communication from - the Company, the Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person. Given the current restrictions on attendance, you are encouraged to appoint the chair of the Meeting as your proxy rather than a named person who will not be permitted to attend the meeting.
To be valid, any proxy card or other instrument appointing a proxy must be received (completed, dated and signed) before 3:00 p.m. Eastern Time on 12 June 2020 (the "share voting cutoff time") by mail to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or by submission via the Internet by going to www.proxyvote.com and following the instructions provided.
Please sign the proxy card exactly as your name appears on the card. If shares are owned jointly, each joint owner should sign the proxy card. If a shareholder is a corporation, limited liability company or partnership, the proxy card should be signed in the full corporate, limited liability company or partnership name by a duly authorised person. If the proxy card is signed pursuant to a power of attorney or by an executor, administrator, trustee or guardian, please state the signatory's full title and provide a certificate or other proof of appointment.
Beneficial Owners: If you are a beneficial owner, your broker, bank, trust or other nominee will arrange to provide materials and instructions for voting your shares. The Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person. Please note that you may not vote shares held in street name by returning a proxy card or voting instruction card directly to the Company unless you provide a legal proxy.
Employees: If you are a current or former Valaris employee who holds shares in the Company's Savings Plan, you will receive voting instructions from the trustee of the plan for shares allocated to your account. If you fail to give voting instructions to the trustee, your shares will be voted by the trustee in the same proportion and direction as shares held by the trustee for which voting instructions were received. To allow sufficient time for voting by the trustee and administrator of the Company's Savings Plan, your voting instructions for shares held in the plan must be received by 11:59 p.m. Eastern Time on 9 June 2020.

9



18.   What can I do if I change my mind after I vote?

Shareholders of Record: If you are a shareholder of record, you may revoke your proxy or otherwise change your vote by doing one of the following:
sending a written notice of revocation to our secretary, Michael T. McGuinty, at the registered office and headquarters of the Company, which must be received before the share voting cutoff time, 3:00 p.m. Eastern Time on 12 June 2020, stating that you would like to revoke your proxy;
by completing, signing and dating another proxy card and returning it by mail to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 in time to be received before the share voting cutoff time, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or
if you voted electronically, by returning to www.proxyvote.com and changing your vote before the share voting cutoff time. Follow the same voting process, and your original vote will be superseded.
Beneficial Owners: If you are a beneficial owner, you can revoke your voting instructions or otherwise change your vote by following the instructions provided by your broker or other nominee before the applicable deadline.
19.   What if I do not specify a choice for a resolution in my proxy?

If you sign and return your proxy card appointing the persons designated by the Board as your proxies without indicating how you want your shares to be voted, your shares will be voted FOR each nominee in Resolution 1 and FOR Resolutions 2 through 12 or otherwise in accordance with our Board's recommendations by the persons designated as your proxies in Question 1.
20.   Will my shares be voted if I do not provide my proxy or instruction form?
In light of UK Government measures relating to the ongoing outbreak of COVID-19, subject to any further announcement by - or shareholder communication from - the Company, this year’s Meeting will be run as a closed meeting and shareholders will not be able to attend in person. If you are a shareholder of record you must provide a proxy in order to vote. If you are a beneficial owner and hold shares through an account with a bank or broker, your shares may be voted if you do not provide voting instructions. Brokerage firms have the authority under the NYSE rules to vote shares for which their customers do not provide voting instructions on routine matters. When a matter is not routine and the brokerage firm has not received voting instructions from the beneficial owner, the brokerage firm cannot vote the shares on that matter. This is called a broker non-vote. For example, the ratification of the selection of independent auditors is considered a routine matter, and the brokerage firm can vote for or against this resolution at its discretion, but the election of directors is not considered routine for these purposes. See Question 16 above for more information on non-routine and routine matters and broker non-votes.
21.   What does it mean if I receive more than one Notice?

If you received multiple Notices, it means that you hold your shares in different ways (trust, custodial accounts, joint tenancy) or in multiple accounts. Each Notice you receive should be voted.
22.   Who will pay for the cost of this proxy solicitation?

We will bear the cost of this proxy solicitation. In addition to solicitation by mail, some of our directors, officers and employees may solicit proxies in person or by telephone for no additional compensation. We will also ask shareholders of record who are brokerage firms, custodians and fiduciaries to forward proxy materials to the beneficial owners of such shares and upon request we will reimburse such shareholders of record for the customary costs of forwarding the proxy materials. We have retained D.F. King & Co., Inc. ("D.F. King") to assist in the solicitation of proxies and anticipate that this will cost us approximately $15,000 plus certain out-of-pocket expenses.

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23. Who will count the votes?
Broadridge Financial Solutions, Inc. will count the votes submitted by proxy and provide such report to our inspectors of election. The inspector(s) of election will be present at the Meeting.
24.   When will Valaris announce the voting results?

We will report the final results on our website (www.valaris.com) in a Current Report on Form 8-K filed with the SEC shortly after the Meeting.
25.
Does Valaris have a policy about Directors' attendance at the Meeting?

It is generally our policy that directors should attend annual general meetings of shareholders barring extenuating circumstances. However, in light of the current UK Government prohibition on public gatherings of more than two people in response to the ongoing outbreak of COVID-19, it will not be possible for all our directors to attend this year’s Meeting in person. Arrangements are being made so that directors who are not present in person will be able to join by telephone.
26.   What can I do if I have audit concerns?

Under Section 527 of the Companies Act, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the Companies Act. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Section 527 of the Companies Act. Where the Company is required to place a statement on a website under Section 527 of the Companies Act, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business that may be dealt with at the Meeting includes any statement that the Company has been required to publish on a website under Section 527 of the Companies Act.
27.   Who should I contact if I have additional questions?

If you have any further questions about voting or attending the Meeting, please contact our proxy solicitor, D.F. King. Shareholders may call toll-free at 1-800-461-9313, and banks and brokers may call collect at 1-212-269-5550. D.F. King may be reached by email at valaris@dfking.com.
Shareholders who have general queries about the Meeting also can call Valaris at 1-713-789-1400 and ask for the Investor Relations department. No other methods of communication will be accepted. You may not use any electronic address provided either in this proxy statement or any related documents (including the proxy materials) to communicate with the Company for any purposes other than those expressly stated.


11



OWNERSHIP OF VOTING SECURITIES
The following tables show amounts and percentages of our Class A ordinary shares (the only class of our securities outstanding and eligible to vote) owned beneficially as of 20 April 2020 by (i) each person or group known by us to beneficially own more than 5% of our outstanding shares; (ii) each of our directors and each director nominee as of the date of this proxy statement; (iii) each of our named executive officers identified in the 2019 Summary Compensation Table (the "Named Executive Officers" or "NEOs"); and (iv) all of our directors and executive officers as a group as of the date of this proxy statement.
Beneficial Ownership Table
 
Beneficial Ownership(1)
 
Name of Beneficial Owner
Amount
 
 
Percentage
 
Luminus Management LLC
36,982,076

(2) 
 
18.64
%
 
1700 Broadway, 26th Floor
 
 
 
 
 
New York, NY 10019
 
 
 
 
 
BlackRock, Inc.
21,122,486

(3) 
 
10.64
%
 
55 East 52nd Street
 
 
 
 
 
New York, New York 10055
 
 
 
 
 
The Vanguard Group
20,773,381

(4) 
 
10.47
%
 
100 Vanguard Blvd.
 
 
 
 
 
Malvern, PA 19355
 
 
 
 
 
Contrarius Investment Management Limited
19,265,989

(5) 
 
9.71
%
 
2 Bond Street
 
 
 
 
 
St. Helier Y9 JE2 3NP, Channel Islands
 
 
 
 
 
Odey Asset Management
10,302,576

(6) 
 
5.19
%
  
12 Upper Grosvenor Street
 
 
 
 
 
London, United Kingdom EC4N6EU
 
 
 
 
 
Dimensional Fund Advisors
10,059,082

(7) 
 
5.07
%
 
6300 Bee Cave Road
 
 
 
 
 
Building One
 
 
 
 
 
Austin TX, 78746
 
 
 
 
 
Azvalor Asset Management
9,950,906

(8) 
 
5.01
%
 
       Paseo De La Castellana
 
 
 
 
 
        110. 28046, Spain
 
 
 
 
 
Named Executive Officers
 
 
 
 
 
Thomas P. Burke
316,980

 
 
%
(9) 
President and Chief Executive Officer
 
 
 
 
 
Carl G. Trowell
225,402

 
 
%
(9) 
Executive Chairman
 
 
 
 
 
Jonathan Baksht
57,286

  
 
%
(9) 
Executive Vice President and Chief Financial Officer
 
 
 
 
 
Gilles Luca
96,953

 
 
%
(9) 
 Senior Vice President and Chief Operating Officer
 
 
 
 
 
Alan Quintero
31,796

 
 
%
(9) 
        Senior Vice President, Business Development
 
 
 
 
 
Michael T. McGuinty
48,144

 
 
%
(9) 
Senior Vice President, General Counsel and Secretary
 
 
 
 
 
P. Carey Lowe
88,755

   
 
%
(9) 
Former Executive Vice President and Chief Operating Officer
 
 
 


 
John S. Knowlton
66,459

 
 
%
(9) 
         Former Senior Vice President, Technical
 
 
 
 
 
Independent Directors
 
 
 

 
Keith O. Rattie
15,859

  
 
%
(9) 
Director
 
 
 
 
 
Paul E. Rowsey, III
30,594

 
 
%
(9) 

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Director
 
 
 
 
 
Mary E. Francis CBE
9,643

 
 
%
(9) 
Director
 
 
 
 
 
Suzanne P. Nimocks
19,120

 
 
%
(9) 
      Director
 
 
 
 
 
William E. Albrecht
16,857

 
 
%
(9) 
      Director
 
 
 
 
 
Frederick Arnold

 
 
%
(9) 
      Director
 
 
 
 
 
Georges J. Lambert

 
 
%
(9) 
      Director
 
 
 
 
 
Thierry Pilenko
687

 
 
%
(9) 
      Director
 
 
 
 
 
Charles L. Szews
18,295

 
 
%
(9) 
      Director
 
 
 
 
 
Adam Weitzman

 
 
%
(9) 
Director
 
 
 
 
 
All current directors and executive officers as a group (16 persons)
887,616

  
 
%
(9) 
____________________ 
(1) 
As of 20 April 2020, there were 198,436,182 shares outstanding. Unless otherwise indicated, each person or group has sole voting and dispositive power with respect to all shares.
(2) 
Based on the Schedule 13D/A filed on 29 January 2020, Luminus Management LLC ("Luminus") may be deemed the beneficial owner of 36,982,076 shares. Luminus reports shared voting power over 36,982,076 shares and shared dispositive power over 36,982,076 shares.
(3) 
Based on the Schedule 13G/A filed on 4 February 2020, BlackRock Inc. ("BlackRock") may be deemed the beneficial owner of 21,122,486 shares. BlackRock reports sole voting power over 20,844,594 shares and sole dispositive power over 21,122,486 shares.
(4) 
Based on the Schedule 13G/A filed on 12 February 2020, The Vanguard Group ("Vanguard") may be deemed to be the beneficial owner of 20,773,381 shares. Vanguard reports sole voting power over 64,643 shares, shared voting power over 41,759 shares, sole dispositive power over 20,692,297 shares and shared dispositive power over 81,084 shares.
(5) 
Based on the Schedule 13G filed on 6 February 2020, Contrarius Investment Management Limited ("Contrarius") may be deemed to be the beneficial owner of 19,265,989 shares. Contrarius reports shared voting power over 19,265,989 shares and shared dispositive power over 19,265,989 shares.
(6) 
Based on the Schedule 13G filed on 14 February 2020, Odey Asset Management Group Ltd ("Odey") may be deemed to be the beneficial owner of 10,302,576 shares. Odey reports shared voting power over 10,302,576 shares and shared dispositive power over 10,302,576 shares.
(7) 
Based on the Schedule 13G/A filed on 12 February 2019, Dimensional Fund Advisors LP ("Dimensional") may be deemed to be the beneficial owner of 10,059,082 shares. Dimensional reports sole voting power over 9,795,444 shares and sole dispositive power over 10,059,082 shares.
(8) 
Based on the Schedule 13G filed on 12 March 2020, Azvalor Asset Management, SGIIC, SA ("Azvalor") may be deemed to be the beneficial owner of 9,950,906 shares. Azvalor reports sole voting power over 9,950,906 shares and sole dispositive power over 9,950,906 shares.
(9) 
Ownership is less than 1% of our shares outstanding.




13



RESOLUTIONS 1a. - 1j.
1.
ORDINARY RESOLUTIONS TO RE-ELECT EACH OF THE FOLLOWING DIRECTORS:
1a.    WILLIAM E. ALBRECHT
1b.    FREDERICK ARNOLD
1c.    THOMAS P. BURKE
1d.    MARY E. FRANCIS CBE
1e.    GEORGES J. LAMBERT
1f.        SUZANNE P. NIMOCKS
1g.    THIERRY PILENKO
1h.    PAUL E. ROWSEY, III
1i.        CHARLES L. SZEWS
1j.        ADAM WEITZMAN

AS DIRECTORS OF THE COMPANY FOR A TERM TO EXPIRE AT THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD IN 2021.

Under the terms of the Transaction Agreement entered into between the Company and Rowan Companies plc ("Rowan"), dated as of 7 October 2018 (as amended, the “Transaction Agreement”), we amended our Corporate Governance Policy to provide that, unless amended, modified or terminated by the unanimous vote of the Board, for two years following the closing of the Rowan Transaction, the Board will nominate each of the above Board nominees (other than Messrs. Arnold, Lambert and Weitzman) for re-election to the Board, except for the case of such person’s earlier death, resignation, retirement, disqualification or lawful removal.
In addition, pursuant to the Cooperation and Support Agreement entered into between the Company and Luminus Management LLC (“Luminus”), our largest shareholder at that time, dated 24 January 2020 (the “Support Agreement”), Adam Weitzman, a representative of Luminus, was appointed to the Board. The Company also agreed that the Board will nominate Messrs. Weitzman, Arnold and Lambert for election as directors at the Meeting. Pursuant to the Support Agreement, Mr. Weitzman will tender his resignation as a director (which the Board may or may not accept) if Luminus sells our shares and after giving effect to such sale Luminus’ aggregate beneficial ownership falls below certain thresholds set forth in the agreement. Furthermore, Luminus has agreed to vote “For” the Company’s Resolutions set forth in this proxy statement at the Meeting.
Accordingly, each of the above Board nominees, who is an incumbent director of the Company, has been nominated by our Board for re-election at the Meeting. Keith O. Rattie and Carl G. Trowell will not stand for re-election and will retire at the Meeting. We have majority voting for the election of directors. A nominee seeking election will be elected if a simple majority of the votes cast are cast in favour of the resolution to elect the director nominee. In determining the number of votes cast, shares that abstain from voting or are not voted will not be treated as votes cast. Each director nominee will be considered separately. You may cast your vote for or against each nominee or abstain from voting your shares in connection with one or more of the nominees.
The Board recommends that shareholders vote FOR each nominee standing for election as director.
If no indication is given as to how you want your shares to be voted, the persons designated as proxies will vote the proxies received FOR each nominee.

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Nominees

William E. Albrecht; age 68; Non-Executive Chairman of California Resources Corporation
Mr. Albrecht has been our director since April 2019 and was a director of Rowan from October 2015 until April 2019. Mr. Albrecht has served as the non-Executive Chairman of the Board of California Resources Corporation (“CRC”), a publicly traded oil and natural gas exploration and production company, since May 2016. He previously served as Executive Chairman of CRC from July 2014 to May 2016. Mr. Albrecht served as Vice President of Occidental Petroleum from May 2008 to July 2014 and as President, Oxy Oil & Gas, Americas from January 2012 to July 2014. Mr. Albrecht also served as President-Oxy Oil & Gas, USA from April 2008 to January 2012. During his tenure with Occidental, Mr. Albrecht had extensive managerial oversight over its upstream assets. Mr. Albrecht has more than 40 years of experience in the oil and gas industry, having previously served as an executive officer for EOG Resources, a domestic energy producer, for eight years and as a petroleum engineer for Tenneco Oil Company for ten years. Since 2016, Mr. Albrecht serves on the board of directors of Halliburton Company and Terra Energy Partners, a privately-held oil and gas exploration and production company. Mr. Albrecht holds a Master of Science degree from the University of Southern California and a Bachelor of Science degree from the United States Military Academy. Mr. Albrecht is a National Association of Corporate Directors (“NACD”) Board Leadership Fellow and has completed NACD’s comprehensive programme of study for directors and corporate governance professionals. Mr. Albrecht currently serves on our Nominating, Governance and Sustainability Committee and Compensation Committee and as our Independent Lead Director.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Albrecht should serve as a director include his experience in various executive positions with extensive managerial oversight, his over 40 years of experience in the oil and gas industry and his broad experience in proactively engaging with regulatory agencies, communities and other stakeholders.
Frederick Arnold; age 66; Retired Financial Executive
Mr. Arnold has been our director since November 2019. Mr. Arnold has 40 years of experience, including senior financial leadership positions at global organisations. Prior to his appointment to the Board, Mr. Arnold spent over 20 years as an investment banker advising clients on matters of corporate finance, including capital markets transactions, capital structure optimisation and mergers and acquisitions across various markets and geographies. Mr. Arnold held a series of senior financial positions with private equity portfolio companies, most recently serving as Chief Financial Officer of Convergex Group, LLC, a provider of agency brokerage and investment technology, from July 2015 until May 2017, where he was responsible for capital allocation and financial operations. Previously, Mr. Arnold served as Executive Vice President, Chief Financial Officer and a member of the executive committee of Capmark Financial Group, Inc. from September 2009 to January 2011. He also served as Executive Vice President of Finance for Masonite Corporation from February 2006 to September 2007. While at Willis Group from 2000 to 2003, Mr. Arnold served as Chief Financial and Administrative Officer of Willis North America, as Group Chief Administrative Officer of Willis Group Holdings Ltd. and as Executive Vice President of Strategic Development for Willis Group Holdings Ltd. He also served as a member of the Willis Group executive committee while holding the latter two positions. Mr. Arnold currently serves on the Board of Directors of Navient Corporation and Lehman Brothers Holdings Inc. Mr. Arnold currently serves on our Audit Committee and Finance Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Arnold should serve as a director include his extraordinary breadth and depth of experience in equity and debt capital markets, operations and governance from his 40-year career in international investment banking and other finance roles, including serving as Chief Financial Officer for multiple companies.
Thomas P. Burke; age 52; President and Chief Executive Officer of Valaris plc
Mr. Burke has served as the President, Chief Executive Officer and a director of Valaris since April 2019. Mr. Burke was appointed President and Chief Executive Officer and elected a director of Rowan in April 2014, serving in those capacities until April 2019. He served as Chief Operating Officer beginning in July 2011 and was appointed President in March 2013. Mr. Burke first joined Rowan in December 2009, serving as Chief Executive Officer and President of LeTourneau Technologies until the sale of LeTourneau in June 2011. From 2006 to 2009, Mr. Burke was a Division President at Complete Production Services, an oilfield services company, and from 2004 to 2006, served

15



as its Vice President for Corporate Development. He serves on the executive committee of the International Association of Drilling Contractors, in addition to serving as the association’s Chairman in 2016.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Burke should serve as a director include his extensive managerial and industry experience and his strong background in operations and investments in the global energy sector.
Mary E. Francis CBE; age 71; Former Senior Civil Servant in British Treasury and Prime Minister's Office (Retired)
Ms. Francis has been our director since May 2013. She is a former senior civil servant in the British Treasury and the Prime Minister’s office and was subsequently Director General of the Association of British Insurers. Ms. Francis served on the Board of Directors of Swiss Reinsurance Company Ltd from October 2012 until April 2018, and has previously served as a non-executive director of the Swiss Re Group. Ms. Francis was appointed to the Boards of Directors of Barclays PLC and Barclays Bank PLC in October 2016. She served on the Board of Directors of Centrica plc, an integrated energy company, between 2004 and 2014, and was Senior Independent Director from 2006 to 2014. From 2005 to 2012, she served as a non-executive director of Aviva plc, and from 2009 to 2012, she served as a non-executive director of Cable & Wireless Communications Plc. She is also a former non-executive director of the Bank of England, Alliance & Leicester plc and St. Modwen Properties PLC and is a Senior Adviser to the International Relations Institute, Chatham House. She earned a Master of Arts in History from Newnham College, University of Cambridge. Ms. Francis currently serves on our Audit Committee and Nominating, Governance and Sustainability Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Ms. Francis should serve as a director include her experience as a director for various British and international public companies, including Swiss Reinsurance Company Ltd, Barclays PLC and Barclays Bank PLC, her tenure as a non-executive director of the Bank of England, Alliance & Leicester plc and St. Modwen Properties PL, her role as a Senior Adviser to the International Relations Institute, Chatham House, her experience as the chairman of board committees for several public companies, her expertise in matters of corporate governance and her experience in senior positions within the UK government.
Georges J. Lambert; age 42; Former Partner and Senior Vice President of The Capital Group (Retired)
Mr. Lambert has been our director since November 2019. Prior to his appointment to the Board, Mr. Lambert spent more than 20 years as an investment professional, with a focus on value/dividend, cyclicals and complex turnaround situations. Most recently, he was a Partner and Senior Vice President of The Capital Group from 1999 to June 2019, where he served in various capacities as a portfolio manager and equity analyst across multiple sectors including energy services, telecommunications and shipping, and chaired research teams in both energy and telecommunications. Mr. Lambert also led Capital International Group’s investment-side European corporate governance efforts between 2008 and 2017. Mr. Lambert earned a Master of Science in Finance from HEC Paris. Mr. Lambert currently serves on our Finance Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Lambert should serve as a director include his management expertise and capital markets and equity analyst experience, including in the energy services sector, his significant corporate governance experience, his tenure as an investment representative for Capital International Group’s governance and stewardship engagements, his in-depth knowledge of the energy industry and the stock market, and his ability to bring a shareholder perspective to the Board, given his extensive experience as a portfolio manager at The Capital Group.
Suzanne P. Nimocks; age 61; Former Director of McKinsey & Company (Retired)
Ms. Nimocks has been our director since April 2019 and was a director of Rowan from December 2010 until April 2019. Ms. Nimocks was formerly a Director (Senior Partner) of McKinsey & Company, a global management consulting firm, from June 1999 to March 2010, and was with the firm in various capacities since 1989, including leader of the firm’s Global Petroleum Practice, Electric Power & Natural Gas Practice, Organization Practice, Risk Management Practice and Strategy Practice. Ms. Nimocks served on several of the firm’s worldwide personnel committees for many years and formerly served as the Houston Office Manager for eight years. Ms. Nimocks currently serves on the boards of ArcelorMittal, Ovintiv Inc. (formerly named Encana Corporation) and Owens Corning, including service on the Appointments, remuneration & corporate governance and sustainability committee of ArcelorMittal; the Human

16



Resources and Compensation Committee (Chair), Audit Committee and Nominating and Corporate Governance Committee of Ovintiv Inc.; and the Finance Committee (Chair) and Compensation Committee of Owens Corning. Ms. Nimocks currently serves as Chairman of our Compensation Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Ms. Nimocks should serve as a director include her global management consulting and energy sector experience and her service on the Boards and various committees of publicly traded companies, including extensive experience in executive compensation through her roles as the Chair of the Human Resources and Compensation Committee of Ovintiv Inc. and as a member of the Compensation Committee of Owens Corning.
Thierry Pilenko; age 62; Former Executive Chairman of TechnipFMC plc (Retired)
Mr. Pilenko has been our director since April 2019 and was a director of Rowan from 2017 until April 2019. In May 2019, Mr. Pilenko retired from the Board of Directors and as Executive Chairman of TechnipFMC plc, a global oil and gas company. He was the former Chairman and Chief Executive Officer of Technip S.A., a leading provider of project management, engineering, and construction services for the energy industry, from April 2007 to January 2017, when FMC Technologies, Inc. consummated its merger with Technip S.A. From March 2004 to January 2007, Mr. Pilenko served as the Chairman and Chief Executive Officer of Veritas DGC, Inc., a seismic services company. Previously, Mr. Pilenko served as Managing Director of SchlumbergerSema, a Schlumberger Ltd. company in Paris, from 2001 to March 2004. From 1998 to 2001, he served as President of Schlumberger GeoQuest. Mr. Pilenko formerly served as a director of TechnipFMC plc, Hercules Offshore, Inc., CGG Veritas (formerly Veritas DGC) and Peugeot SA. Mr. Pilenko currently serves on our Nominating, Governance and Sustainability Committee and Compensation Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Pilenko should serve as a director include his significant international oil and energy policy expertise, his service on boards and committees of publicly traded companies, his extensive experience in the oil and gas energy industry, including CEO leadership positions, and his strong background in finance, operations, management and investments in the global energy sector.
Paul E. Rowsey, III; age 65; Former Chief Executive Officer of Compatriot Capital, Inc. (Retired)
Mr. Rowsey served as Non-Executive Chairman of our Board from 2015 to April 2019, and has served as a director since 2000. In September 2017, he retired as the President and Chief Executive Officer of Compatriot Capital, Inc., a real estate investment and operating company, where he was employed since 2011. Prior to joining Compatriot, he was a founder and the managing partner of E2M Partners, LLC, a sponsor and manager of private real estate equity funds and an affiliate of Compatriot. He serves as a member of the Board of Directors of Powdr Corporation, one of the largest alpine skiing and outdoor sports companies in the United States, based in Park City, Utah; KDC Holdings, a national real estate investment and development firm, based in Dallas, Texas; JLB Partners, LLC, a multifamily housing development firm and its affiliate, Longbrook Capital Partners, LLC, based in Dallas, Texas; and Invesco Real Estate Income Trust, Inc., a real estate investment company, based in Dallas, Texas. Mr. Rowsey is a 1977 magna cum laude graduate of Duke University with a degree in management science and a 1980 cum laude graduate of Southern Methodist University School of Law. Mr. Rowsey also serves on our Compensation Committee, Finance Committee and as the Chairman of our Nominating, Governance, and Sustainability Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Rowsey should serve as a director include his expertise in financial, business and legal matters, including his experience as the President and Chief Executive Officer of Compatriot Capital, Inc., his experience as the founder and the managing partner of E2M Partners, LLC, a sponsor and manager of private real estate equity funds and an affiliate of Compatriot and his extensive negotiating experience in complex business transactions and his general business acumen.
Charles L. Szews; age 63; Former Chief Executive Officer of Oshkosh Corporation (Retired)
Mr. Szews has been our director since April 2019 and was a director of Rowan from August 2016 until April 2019. In December 2015, Mr. Szews retired from Oshkosh Corporation, a leading global manufacturer of specialty vehicles and vehicle bodies serving access equipment, defense, fire and emergency and commercial markets. He joined Oshkosh in 1996 as Vice President and CFO, was appointed Executive Vice President in October 1997, and was appointed President, Chief Operating Officer and as a director in October 2007. Mr. Szews was appointed Chief Executive Officer of Oshkosh in January 2011. Prior to joining Oshkosh, he began his career with Ernst & Young, and was Vice President and Controller at Fort Howard Corporation during its leveraged buyout. Since 2014, Mr. Szews

17



has served as a director for Commercial Metals Company, an operator of mini- and micro-steel mills located in the Southern United States and Poland. In November 2016, Mr. Szews joined the board of Group1 Automotive, a Fortune 500 automotive retailer. In April 2018, Mr. Szews was appointed to the board of directors of Allegion plc, a provider of security products and solutions for homes, businesses, schools and other institutions. From 2006 to 2013, Mr. Szews also served on the board of directors and on the Audit and Nominating and Corporate Governance Committees of Gardner Denver Inc., a reocognised leader in compressed air and gas, vacuum and fluid transfer technologies to industries throughout the world. Mr. Szews holds a degree in Business Administration from the University of Wisconsin - Eau Claire. Mr. Szews currently serves on our Audit Committee and as Chairman of our Finance Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Szews should serve as a director include extensive executive management experience, public company directorships and committee appointments and his significant experience with international sales, capital allocation, mergers and acquisitions, business management and finance.
Adam Weitzman; age 35, Partner Luminus Management LLC

Mr. Weitzman, age 35, has been our director since February 2020. Mr. Weitzman is a Partner at Luminus, an investment management firm, where he has been overseeing portfolios that invest across the capital structure of offshore drilling, mining, refining, and solar companies for more than a decade and is part of the firm’s risk working group. Prior to joining Luminus in 2008, he worked as an analyst at SAC Capital Management and as an investment banker at Goldman Sachs. Mr. Weitzman graduated from the University of Pennsylvania, Summa Cum Laude, with a Bachelor of Science in Economics from The Wharton School. Mr. Weitzman serves on our Compensation Committee and Finance Committee.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Weitzman should serve as a director include his experience in debt and equity capital markets, expertise in capital structure and asset allocation, as well as management and governance experience from overseeing various portfolio companies in the energy and power sector. He will also bring his perspective as a representative of our largest shareholder.




18



RESOLUTIONS 2, 3 AND 4
2.
AN ORDINARY RESOLUTION TO RATIFY THE AUDIT COMMITTEE'S APPOINTMENT OF KPMG LLP (U.S.) AS OUR U.S. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING 31 DECEMBER 2020.
3.
AN ORDINARY RESOLUTION TO APPOINT KPMG LLP (U.K.) AS OUR U.K. STATUTORY AUDITORS UNDER THE COMPANIES ACT (TO HOLD OFFICE FROM THE CONCLUSION OF THE MEETING UNTIL THE CONCLUSION OF THE NEXT ANNUAL GENERAL MEETING OF SHAREHOLDERS AT WHICH ACCOUNTS ARE LAID BEFORE THE COMPANY).
4.
AN ORDINARY RESOLUTION TO AUTHORISE THE AUDIT COMMITTEE TO DETERMINE OUR U.K. STATUTORY AUDITORS' REMUNERATION.
Our Audit Committee has appointed the U.S. accounting firm KPMG LLP (U.S.) to serve as our U.S. independent registered public accounting firm for the fiscal year ending 31 December 2020. KPMG LLP (U.S.) has served as our U.S. independent registered public accounting firm since the fiscal year ended 31 December 2002, having been duly appointed by the Board or by the Audit Committee each year in conformity with then-applicable rules. Our Audit Committee has also appointed KPMG LLP (U.K.), to serve as our statutory auditors under the Companies Act. KPMG LLP (U.K.) has served as our statutory auditors since our 2015 annual general meeting of shareholders. Prior to that time, KPMG Audit Plc, a subsidiary of KPMG LLP (U.K.), served as our statutory auditors since our re-registration as a public limited company in December 2009. We are asking our shareholders to authorise the Audit Committee to determine KPMG LLP (U.K.)'s remuneration as statutory auditors in accordance with the Audit Committee's procedures and applicable law. Due to UK Government legislation related to the COVID-19 outbreak, we do not expect representatives of KPMG LLP (U.S.) and KPMG LLP (U.K.) to be present at the Meeting, nor to have the opportunity to make a statement if they desire to do so or be available to respond to appropriate questions.
The Board recommends that shareholders vote FOR the ordinary resolution to ratify the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31 December 2020; FOR the ordinary resolution to appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the Companies Act (to hold office until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company); and FOR the ordinary resolution to authorise the Audit Committee to determine our U.K. statutory auditors' remuneration.
Although ratification of the Audit Committee’s appointment of KPMG LLP (U.S.) is not legally required, the Board is submitting this selection to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If our shareholders fail to ratify the selection, it will be regarded as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.
If no indication is given as to how you want your shares to be voted, the persons designated as proxies will vote the proxies received FOR Resolutions 2, 3 and 4.
Independent Auditor Pre-approval Policies and Procedures

Consistent with SEC rules and policies regarding auditor independence, the Audit Committee has responsibility for appointing and approving the compensation and overseeing the work of our U.S. independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our U.S. independent registered public accounting firm.
Under the policy, we submit an itemised listing of all services to the Audit Committee for which pre-approval is requested. Such listing includes a description of each proposed service, the associated estimated fees and other terms of the engagement. To the extent any such service is a non-audit service, the submission includes an explanation as to why such service qualifies as a permitted non-audit service and why providing such service would not impair the independence of our U.S. independent registered public accounting firm or our U.K. statutory auditors.

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Fees and Services

The aggregate fees (excluding value added taxes) billed to us for the fiscal years ended 31 December 2019 and 2018 by KPMG LLP (U.S.) and its affiliates (including KPMG LLP (U.K.)) were as follows (in thousands):
 
2019
 
2018
Audit Fees(1)
$
4,226

 
$
2,618

Tax Fees(2)
1,094

 
946

 
$
5,320

 
$
3,564

 ____________________ 
(1) 
Includes fees for the audit of our annual consolidated financial statements and audit of the effectiveness of our internal control over financial reporting included in our annual report on Form 10-K, reviews of condensed consolidated financial statements included in our quarterly reports on Form 10-Q, the audit of our U.K. statutory accounts, audits of certain subsidiary statutory accounts, attestation services and procedures conducted in connection with debt or equity transactions and consents to incorporate KPMG LLP (U.S.)'s reports into registration statements filed with the SEC for each respective year.
(2) 
Represents fees for tax compliance and other tax-related services.
Our Audit Committee pre-approved the services provided during 2019 and 2018 described above, in accordance with our Audit Committee's policy and the pre-approval requirements of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"). Accordingly, there were no services for which the de minimus exception, as defined in Section 202 of the Sarbanes-Oxley Act, was applicable. Our Audit Committee has considered whether the provision of non-audit services by KPMG LLP (U.S.) were compatible with maintaining KPMG LLP (U.S.)'s independence and has determined that the provision of such non-audit services does not undermine KPMG LLP (U.S.)'s independence.

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CORPORATE GOVERNANCE
Board Refreshment and Enhanced Governance

Since our last annual general meeting of shareholders, Valaris has proactively engaged with shareholders, refreshed the Board and enhanced governance. Our recent Board refreshment and governance enhancement efforts include:
Two of our longer tenured directors retired from our Board in November 2019;
The Board appointed two new independent directors, Messrs. Arnold and Lambert, with expertise in capital markets, finance and corporate governance in November 2019;
The Board formed the Finance Committee to assist in its oversight of the Company’s capital structure and financial strategies;
In January 2020, the Board added a third new independent director, Adam Weitzman, who is also a representative from our largest shareholder at the time of his appointment;
Mr. Trowell will step down as Executive Chairman at the end of the day on 30 April 2020, and not stand for re-election at the Meeting;
Another director, Keith O. Rattie, will retire and not stand for re-election at the Meeting, and the size of the Board will decrease to 10 directors;
Mr. Rowsey will be appointed as our non-executive Chairman and will assume the duties of the Independent Lead Director upon Mr. Trowell's stepping down as Executive Chairman; and
The Board refreshment has reduced the average age and tenure of our Board and augmented the Board’s expertise in equity and debt capital markets and corporate governance.
Corporate Governance Guidelines

We have adopted a Corporate Governance Policy, which includes governance guidelines that assist the Board and its committees in the exercise of their responsibilities under applicable law and the listing standards of the NYSE. These governance guidelines provide a framework for the Company's governance and the Board's activities, covering such matters as Board membership criteria, director independence, Board meetings, Board structure, Board access to management and independent advisors, limitations on outside directorships, conflicts of interest, director compensation, shareholder communications to the Board, director attendance at shareholder meetings, evaluation of Board and Chief Executive Officer performance, management succession planning, risk oversight, share ownership guidelines and other corporate governance practices and principles. Our Corporate Governance Policy is available in the Governance Documents section under About on our website (www.valaris.com). Paper copies also are available upon request without charge. Such requests should be directed to our Investor Relations Department at 5847 San Felipe, Suite 3300, Houston, Texas 77057.

Corporate Governance Policy

Our Corporate Governance Policy established the Board positions of Executive Chairman and Independent Lead Director and sets out the responsibilities of such positions. For so long as the chairman of the Board is an Executive Chairman, the Board will be required to appoint an Independent Lead Director. Our Executive Chairman, Mr. Trowell, will step down as Executive Chairman at the end of the day on 30 April 2020 and continue to serve as a non-executive director through the Meeting. Mr. Rowsey will serve as our non-executive Chairman commencing effective as of 1 May 2020. In accordance with our Corporate Governance Policy, when Mr. Rowsey becomes the non-executive Chairman, he will assume the responsibilities of Independent Lead Director, and Mr. Albrecht will no longer serve as the Independent Lead Director.

Our Corporate Governance Policy also provides that, for two years following the closing of our merger with Rowan (the "Rowan Transaction"), the Nominating, Governance and Sustainability Committee (the "NGS Committee") of the Board will consist of two legacy Ensco designees and two legacy Rowan designees. Each other committee of the

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Board will consist of at least one legacy Ensco designee and at least one legacy Rowan designee, and the Chairmen of such committees will be divided as evenly as possible between legacy Ensco and legacy Rowan designees.

In addition to changing the leadership positions of the Board, our Corporate Governance Policy also adds certain requirements of the Board that will continue for up to two years following the effective time of the Rowan Transaction unless amended, modified or terminated by unanimous vote of the Board. Such unanimous approval of the Board is required for, among other things, amendments to the employment agreements of Messrs. Burke and Trowell during the two-year and 18-month periods, respectively, following the effective time of the closing of the Rowan Transaction. In addition, if the NGS Committee of the Board, by unanimous vote, determines not to renominate any Ensco or Rowan designee, then such designee shall not be renominated. If such designee is a member of the NGS Committee of the Board, then a unanimous vote of every other member of such committee and the unanimous vote of the Board other than such designee is required to not nominate such designee for re-election.
Governance Practices

Our ethics, governance and compliance practices address all NYSE content requirements, including an annual evaluation of the Board and its committees and annual reviews of the committee charters, as reflected in our Code of Business Conduct ("Code of Business Conduct") and our Corporate Governance Policy. Our governance practices provide that the independent directors conduct regular executive sessions without management, chaired by our Independent Lead Director, William E. Albrecht, and a formal annual evaluation of our Chief Executive Officer's performance. The Board fulfilled these requirements during 2019.
Director Nominations

The NGS Committee, with input from other Board members, is primarily responsible for identifying and screening candidates for nomination to Board membership. Additionally, when appropriate, we may retain the services of a third party to identify, evaluate or assist the NGS Committee and the Board in evaluating potential director nominees. Our Board is responsible for nominating individuals to serve on our Board.
Pursuant to our Corporate Governance Policy, candidates nominated for election or re-election to our Board should possess the following qualifications:
personal characteristics:
highest personal and professional ethics, integrity and values,
an inquiring and independent mind, and
practical wisdom and mature judgement;
experience at the policy-making level in business, government or education;
expertise that is useful to our Company and complementary to the background and experience of other Board members (e.g., previous executive and board experience, an international perspective, capital intensive cyclical business experience and knowledge of the global oil and gas industry are considered to be desirable);
willingness to devote the required amount of time to perform the duties and responsibilities of Board membership;
commitment to serve on the Board over a period of several years to develop knowledge about our principal operations;
willingness to represent the best interests of all shareholders and objectively appraise management performance; and
no involvement in activities or interests that create a conflict with the director's responsibilities to us and our shareholders.
The NGS Committee will evaluate the qualifications of each director candidate, including any nominees recommended by shareholders, against these criteria in making recommendations to our Board concerning director nominations. The NGS Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the perceived needs of our Board at a given point in time and periodically reviews and updates the criteria listed above as deemed necessary. Diversity in personal background, race, gender, age and

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nationality for the Board as a whole may be taken favourably into account in considering individual candidates, and it is one of the many factors that the NGS Committee may consider when identifying individuals for Board membership.
Our Board currently consists of 12 members, including two women. The NGS Committee may identify potential director candidates from a number of sources, including recommendations from directors, management, shareholders and executive recruiting firms retained for such purpose. The NGS Committee uses the same criteria for evaluating candidates regardless of the source of referral. In identifying director candidates, the NGS Committee endeavors to include, and have any search that it engages include, women, minority and other diverse candidates in the pool from which the NGS Committee selects director candidates.
The NGS Committee will consider director candidates recommended by shareholders. Shareholders wishing to propose a candidate for consideration by the NGS Committee may do so by writing our secretary at our principal executive offices and following the requirements of our Articles of Association for director nominations referred to in the "Information Concerning Shareholder Proposals for the 2021 Annual General Meeting of Shareholders" section of this proxy statement. As of 20 April 2020, we did not receive any nominations for director made by any person or group beneficially owning more than 5% of our shares by the date specified in Article 46.2 of our Articles of Association.
Director Independence

Our Articles of Association and Corporate Governance Policy state that at least a majority of the Board shall be independent, as the term is defined by SEC rules and NYSE Corporate Governance Standards. Except with respect to their directorships and as set forth below, we do not have any business or other relationships with our independent directors. Only independent directors serve on the Board's standing committees. In this regard, our Board has affirmatively determined that all director nominees and directors (with the exception of Messrs. Burke and Trowell) (being Mr. Albrecht, Mr. Arnold, Ms. Francis, Mr. Lambert, Ms. Nimocks, Mr. Pilenko, Mr. Rattie, Mr. Rowsey, Mr. Szews and Mr. Weitzman) are independent and have no material relationship with us. In addition, the Board affirmatively determined that each of Messrs. Clark, Gaut, Golden, Haddock, Kalman and Wedemeyer and Ms. Decyk was independent during the period in 2019 when each such person served on the Board. Accordingly, a substantial majority of our Board currently is independent as defined above. In reaching its independence determinations, the NGS Committee and the Board considered the following:
During 2019, Mr. Pilenko was employed by an organisation that does business with Valaris. The amount received by Valaris or such other organisation in each of the last three fiscal years did not exceed the greater of $1 million or 1% of either Valaris' or such organisation's consolidated gross revenues.
During 2019, Mr. Albrecht served on the Board of Directors of organisations that do business with Valaris. The amount received by Valaris or such other organisation in each of the last three fiscal years did not exceed the greater of $1 million or 1% of either Valaris’s or such organisation's consolidated gross revenues.
Our Corporate Governance Policy provides that a director who changes his or her principal occupation shall promptly notify the Board of the change and submit a pro-forma letter of resignation to the Board. Under this policy, the other directors shall then meet in private session, determine whether the change of occupation impacts the director's independence or creates a conflict of interest and decide whether to accept or reject the pro-forma resignation.
Each of our directors has prepared a Director Declaration of Interest, disclosing existing or potential conflicts of interest, in conformity with U.K. law, custom and practice. The declarations are prepared and reviewed by the Board at least annually. The Board will conduct an annual review of Director Declarations of Interest during its June 2020 Board meeting.

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Board Structure

Mr. Trowell currently serves as our Executive Chairman of the Board, and Mr. Burke serves as our President and Chief Executive Officer. After the closing of the Rowan Transaction, the Board established the positions of Executive Chairman and Independent Lead Director, and the Chief Executive Officer position was separate from these roles. Our Executive Chairman, Mr. Trowell, will step down as Executive Chairman at the end of the day on 30 April 2020 and continue to serve as a non-executive director through the Meeting at which time he will retire from his director position. Mr. Rowsey will serve as our non-executive Chairman commencing 1 May 2020. In accordance with our Corporate Governance Policy, when Mr. Rowsey becomes the non-executive Chairman, he will assume the responsibilities of Independent Lead Director, and Mr. Albrecht will no longer serve as the Independent Lead Director.
At this time, the Board believes a separation of the Chairman and Chief Executive Officer best serves the objectives of the Board's oversight of management, the Board's ability to carry out its roles and responsibilities on behalf of the shareholders, and the Company's overall corporate governance. The Board believes the separation of the Chairman and Chief Executive Officer roles also allows Mr. Burke to focus on operating and managing the Company and leverages the Chairman's experience and perspectives. In addition, the Board believes that its leadership structure as described above provides an effective framework for addressing the risks facing our Company, as discussed in greater detail under "Risk Management Oversight." The Board has authority to modify this structure to best address the Company's circumstances and advance the best interests of shareholders as and when appropriate.
Our governance practices provide for strong independent leadership, independent discussion among directors, independent evaluation of, and communication with, members of senior management and independent oversight of the Company's operational, fiscal and risk management activities. These governance practices are reflected in our Corporate Governance Policy and the standing committee charters, all of which are available on our website.
Relevant provisions of the existing Corporate Governance Policy include:
Independent directors meet at regularly scheduled executive sessions outside the presence of the Chief Executive Officer and other Company personnel at each regular Board meeting and may convene additional executive sessions during any Board meeting or by notice of a special Board meeting, which any two directors may cause to be called.
Independent directors have open access to Valaris' management and independent advisors, such as attorneys or auditors.
Independent directors are encouraged to suggest items for inclusion in the agenda for Board meetings and are free to raise subjects that are not on the meeting agenda.
The Independent Lead Director leads executive sessions of the independent directors and serves as the interface between the independent directors and the Chief Executive Officer in communicating the matters discussed during executive sessions. The Board believes that this structure facilitates full and frank discussions among all independent directors. The Independent Lead Director also:
manages the process by which Board meeting agendas and meeting schedules are approved;
advises the Chief Executive Officer and the Executive Chairman as to the quality, quantity and timeliness of the information submitted to the Board by the Company's management;
develops the agendas for executive sessions of the Board's independent directors;
serves as principal liaison between the independent directors, the Executive Chairman and the Chief Executive Officer in respect of Board issues; and
participates in recommendations regarding recruitment of new directors, management succession planning and annual Board performance and Chief Executive Officer evaluations.
When Mr. Rowsey becomes the non-executive Chairman on 1 May 2020, the role of Independent Lead Director will be combined with the position of non-executive Chairman.

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Board Meetings and Committees

The Board met 22 times during the year ended 31 December 2019. The Board has four standing committees, the Audit Committee, the NGS Committee, the Compensation Committee and the Finance Committee. During 2019, each incumbent director attended at least 75% of the aggregate meetings held by the Board and the committees of which he or she was a member.
Our Board has affirmatively determined that all director nominees and directors (with the exception of Mr. Trowell and Mr. Burke) are independent, as the term is defined by SEC rules and the Corporate Governance Standards of the NYSE ("NYSE Corporate Governance Standards"), and have no material relationships with us. The independent directors conducted executive sessions without management during each of the four regular quarterly meetings of the Board. Only independent directors serve on the Board's standing committees.
Audit Committee

We have established and maintain an Audit Committee, which operates under a charter, in accordance with the rules promulgated under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Audit Committee appoints our U.S. independent auditors to examine, review and audit our consolidated financial statements, reviews the general scope of services to be rendered by the independent auditors, pre-approves all services of the independent auditors and authorises payment of the associated fees, reviews our financial condition and results of operations and makes inquiries as to the adequacy of our internal controls over financial reporting. Our Audit Committee met nine times during 2019. The Audit Committee currently consists of Chairman Rattie, Mr. Arnold, Ms. Francis and Mr. Szews, all of whom meet the independence criteria for audit committee members prescribed by the SEC and NYSE. None of the members of our Audit Committee serve on more than three public company audit committees.
Our Board has determined that each of the four members of the Audit Committee meets the requisite SEC criteria to qualify as an audit committee financial expert, is financially literate and has accounting or related financial management expertise as defined in the NYSE Corporate Governance Standards. In making recommendations and determinations regarding audit committee financial experts, our Board and the Audit Committee considered the relevant academic and professional experience of the Audit Committee members.
Compensation Committee

The principal functions of our Compensation Committee, as set forth in its charter, are to review and approve executive compensation, including matters regarding our various benefit plans, independently or in conjunction with our Board, as appropriate. During 2019, the Compensation Committee met eight times. The Compensation Committee currently consists of Chairman Nimocks, Messrs. Albrecht, Pilenko, Rowsey and Weitzman, all of whom meet the independence criteria prescribed by the SEC and NYSE for service on a compensation committee.
Nominating, Governance and Sustainability Committee

The principal functions of our NGS Committee, as set forth in its charter, are to select, identify and screen candidates for nomination to our Board, to recommend the composition of committees of our Board, to recommend our slate of officers, to oversee and recommend matters of corporate governance, independently or in conjunction with our Board, as appropriate, and to provide oversight and guidance with regard to environmental, social and governance issues. During 2019, the NGS Committee met six times. The NGS Committee currently consists of Chairman Rowsey, Messrs. Albrecht and Pilenko and Ms. Francis, all of whom meet the independence criteria prescribed by the NYSE for service on a nominating committee.
Finance Committee


The principal functions of our Finance Committee are to review and evaluate the Company’s liquidity, balance sheet, capital allocation, asset portfolio management and capital structure; make recommendations to the Board regarding

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actions to be considered in furtherance of optimising the Company’s use of capital and its capital structure, and overseeing the execution of capital structure activities. During 2019, the Finance Committee met five times. The Finance Committee currently consists of Chairman Szews and Messrs. Arnold, Lambert, Rowsey, and Weitzman.
Director Attendance at the Meetings of Shareholders

Our Corporate Governance Policy provides that, barring extenuating circumstances (including but not limited to the UK government restrictions on public gatherings in force as at the date of this document), all members of the Board shall attend our annual general meetings of shareholders and also are encouraged to attend any and all other general meetings that may be duly convened. With the exception of J. Roderick Clark, all incumbent directors serving on the Board at the time of the 2019 Annual General Meeting of Shareholders attended the meeting.
Code of Business Conduct

Our Code of Business Conduct applies to all of our officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller. Our Code of Business Conduct addresses all NYSE content requirements and includes provisions addressing conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of our assets and compliance with our policies and with laws, rules and regulations, including laws addressing insider trading, antitrust and anti-bribery, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. No waivers of the provisions of our Code of Business Conduct have been requested or granted since the Code of Business Conduct was first issued on 1 November 2002.
Our Code of Business Conduct provides for confidential and anonymous submission of reports of non-compliance with our standards, policies, practices and procedures to a management committee and also establishes a means for submission of reports of accounting, auditing or other business irregularities by any employee or other person directly to our Board or relevant Board Committee.
Shareholder Communications

Shareholders, employees and other interested parties may report concerns regarding questionable accounting, auditing or other matters on a confidential basis directly to the relevant presiding Valaris Committee Chairs, namely the Audit Committee, the NGS Committee, and the Compensation Committee, all of whom are independent non-employee directors. This process, which is available on the Ethics & Compliance section under Corporate Responsibility on our website (www.valaris.com), provides a means for submission of such interested parties' communications. Such communications may be submitted by mail, addressed as follows: Valaris, 1415 South Voss Rd., Suite 110, P.O. Box 135, Houston, Texas 77057. Mail so addressed will be forwarded, as appropriate, directly to the relevant then-presiding standing Board committee chairs and will not be screened by management.
Hotline Reports and Investigations

We have a telephonic and web-based Hotline system to encourage reporting of possible wrongdoing, violations of our Code of Business Conduct, or other issues that threaten our reputation (the "Hotline"). The Hotline is managed by an independent third party to protect employee privacy and includes the ability to report concerns anonymously, where permitted by law. Any Hotline allegations are investigated and addressed by a Company management committee working under the direction of, and reporting regularly to, the Audit Committee.

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Risk Management Oversight

The Board and its committees are actively involved in the oversight of risks that could impact our Company. At each regular meeting, the Board reviews the Company's financial condition and results of operations and discusses various strategies as it deems appropriate considering market conditions facing the Company. In particular, given difficult market conditions, the Board reviewed the Company's business and financial strategy and strategic options at every Board meeting in 2019. The Board oversees the management of enterprise-wide risks, such as those related to macroeconomic and market conditions, commodity prices, strategic decisions, significant operating risks and disruptions. The Board annually approves a capital budget, with subsequent approval required for any significant variations. On a quarterly basis, the General Counsel reports to the Board on legal matters that may have a significant impact on the Company's financial statements. The Board also receives periodic reports regarding the Company's insurance programme and is apprised of all material variations in coverage or premium cost in connection with each annual insurance renewal.
The Board has delegated to its Committees the responsibility to monitor certain risks and receives regular updates on those risks. Certain risks monitored by each Committee are the following:
The Finance Committee was established in 2019 to evaluate risk from the standpoint of the Company's liquidity, balance sheet and capital allocation, seeking to optimise the Company's use of capital and its capital structure to reduce the Company's finance risk in a time that we are incurring substantial losses and negative cash flows while in a highly leveraged financial condition
On behalf of the Board, the Audit Committee plays a significant role in oversight of risks associated with the Company's financial performance, internal and external audit functions, legal and tax contingencies and other exposures. The Company's independent auditors, the Director of Internal Audit and the Chief Compliance Officer report to the Audit Committee at each regular quarterly meeting. The Audit Committee reviews and approves the annual internal audit plan and also receives reports on all internal audits. Hotline reports and related investigations conducted pursuant to our Code of Business Conduct are reviewed in executive session of the Audit Committee with the Chief Compliance Officer. On a quarterly basis, the Vice President-Tax submits a report to the Audit Committee on tax matters that may have a significant impact on the Company's financial statements.
The Compensation Committee, in consultation with its compensation consultants, establishes performance goals for the Company's various compensation plans that are intended to drive behaviour that does not encourage or result in any material risk of adverse consequences to the Company and/or its shareholders.
The NGS Committee and the Board also are actively involved in succession planning both from a general standpoint and with respect to a potential emergency situation that might impact the ability of the Board and executive management to continue the performance of their respective functions and responsibilities.
In addition, the Board oversees the Company's management of risk in the areas of health, safety and environment. For example, the Board reviews statistics regarding safety incidents, including an in-depth review of the most serious incidents and related mitigation; reviews the regional risk to employees, assets and the Company's operations; and reviews any material compliance issues or any material pending or threatened proceedings regarding health, safety or environmental matters.
The Board also oversees risks through the Company's enterprise risk management programme designed to identify significant risks to us, including operational safety, operational performance, regulatory, environmental and cybersecurity risks. Our Treasury and Risk Management Departments are responsible for implementing the programme, which involves the identification of risks within and facing the Company, the assessment of existing and required mitigation plans for those risks and ongoing monitoring of both. On a quarterly basis, these departments assess risk trends, identify new potential risks and review mitigation plans with a cross-functional Enterprise Risk Committee. The Enterprise Risk Committee reports its results to the Board periodically. The Board reviews the identified risks, mitigation plans and monitoring reports and takes action as deemed appropriate.
Sustainability

The 2020 Valaris Sustainability Report was published on the Corporate Responsibility page on our website (www.valaris.com) on 27 April 2020.


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Our Sustainability Report sets forth our core values, which are centered on ethical behaviour, the protection of people and minimising our impact to the environment in order to achieve success. In addition, a strategic focus on sustainable business practices, and an effort to continually improve our performance, allow us to protect and advance local communities, our customers and employees, and the environment.

Some of the commitments that help us achieve our core values include:

Health, Safety and the Environment, where we promote spill prevention efforts, effective well control, proper waste management and the reduction of greenhouse gas emissions;
Ethical Business Practices, where we commit to conducting our business in accordance with the highest ethical standards;
Employees, where we encourage leadership and accountability, organisational capability, teamwork and respect and fair employment practices;
Communities, where we create job opportunities and engage the communities in the areas that we operate;
Ingenuity, where we encourage innovation, and drive ingenuity in order to support operational excellence; and
Customers and Suppliers, where we provide quality service offerings and engage in fair competition.

Our Sustainability Report is not incorporated into this proxy statement but may be found on the Sustainability section of our website.

In 2019, the NGS Committee's charter was amended such that the Committee would be responsible for providing oversight and guidance with regard to environmental, social and governance matters and for reviewing the Company's Sustainability Report.
Governance Transparency

Our Board, its standing committees and management are committed to continually pursuing best practices of corporate governance, accountability and transparency. Our Audit Committee Charter, the NGS Committee Charter, the Compensation Committee Charter, the Corporate Governance Policy and the Code of Business Conduct are available in the Governance Documents section under About on our website (www.valaris.com). Additional data available under the About tab on our website also includes information on our Board members and the Board’s committee composition. Additionally, our website under the "Investors-Financials" tab has a link to our public filings with the SEC, including equity ownership reports by our directors and executive officers required under Section 16 of the Exchange Act. Our 2020 Sustainability Report and instructions for submission of Hotline reports can be found on the "Corporate Responsibility" section of our website
Shareholder Outreach Programme

We frequently communicate with shareholders through earnings conference calls and presentations at industry conferences, as well as meetings and phone calls with analysts, portfolio managers and corporate governance specialists to discuss a wide range of issues. During the fall and winter preceding the filing of this proxy statement, we proactively reached out to investors representing approximately 80% of our shares outstanding as of September 30, 2019, with approximately 48% of our shareholders accepting to meet with us. Investor feedback is reported to the Board on a regular basis, and in many instances members of our Board have participated in investor meetings.
Related Party Transactions

In accordance with our Audit Committee Charter, except with respect to compensatory arrangements with our directors or officers that fall within the purview of the Compensation Committee, the Audit Committee is responsible for reviewing and approving the terms and conditions of all proposed transactions between any Company officer, director or any nominee for director, or an immediate family member or affiliate of any officer, director or nominee for director, or a security holder who is known to the Company to be the beneficial owner of more than five percent of any class of the Company’s voting securities, or an immediate family member of any such security holder, and the Company or any of its subsidiaries or affiliates to ensure that such “related-party” transactions are fair and in the overall best interest of the Company. There were no related party transactions required to be reported for 2019 as defined under SEC rules.

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Under the Support Agreement, the Company agreed to reimburse Luminus for certain reasonable, documented out-of-pocket fees and expenses incurred in connection with Luminus' engagement with the Company in an amount not to exceed $3,000,000 in the aggregate. No such reimbursement was made in 2019.



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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of Valaris plc (the "Company") is composed of four independent directors who satisfy the requirements of independence as established by Section 10A of the Securities Exchange Act of 1934, as amended, and the New York Stock Exchange listing standards. The Audit Committee is governed by a written Charter adopted by the Board of Directors. Our Audit Committee Charter is available in the Governance section under the About tab on our website (www.valaris.com). To fulfill its responsibilities, the Audit Committee of the Company met nine times during the 2019 fiscal year.
Management is responsible for the Company's internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. The independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements and internal control over financial reporting in accordance with standards of the Public Company Accounting Oversight Board (United States) and for issuing a report thereon. The Audit Committee is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm employed by the Company (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent registered public accounting firm reports directly to the Audit Committee.
The Audit Committee has established practices to evaluate the qualifications, compensation, performance and independence of the Company’s independent registered public accounting firm. In determining whether to reappoint the independent registered public accounting firm employed by the Company, the Audit Committee considered the qualifications, performance, and independence of the firm and the audit engagement team; the quality of services provided by the firm; the effectiveness of the communication and interaction between the independent registered public accounting firm, management and the Audit Committee; and the fees charged for the quality and breadth of services provided.
The Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board.
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the independent registered public accounting firm's independence.
The Audit Committee has recommended, and the Board of Directors, in the exercise of its business judgement, has approved, inclusion of the Company's audited consolidated financial statements in the Company's annual report on Form 10-K for the year ended 31 December 2019, to be filed with the U.S. Securities and Exchange Commission (the "SEC"). The recommendation was based upon the Audit Committee's review, the exercise of its business judgement, the discussions referred to above and reliance upon the Company's management and independent registered public accounting firm.
Submitted by the Audit Committee:
Keith O. Rattie, Chairman
Frederick Arnold
Mary E. Francis CBE
Charles L. Szews
25 February 2020
In accordance with the recommendation of our Audit Committee, our Board approved inclusion of the audited consolidated financial statements in our annual report on Form 10-K for the year ended 31 December 2019, and all of our directors acknowledged such approval by signing the annual report on Form 10-K as filed with the SEC on 21 February 2020.
The U.K. statutory auditor is responsible for conducting the statutory audit of the Company's U.K. statutory accounts in accordance with the requirements of the Companies Act.

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COMPENSATION COMMITTEE REPORT
The functions of the Compensation Committee of the Board, among others, are to review and approve executive officer compensation and employee compensation matters, including matters regarding the Company's various benefit plans, and to continually assess the effectiveness of these programmes in consideration of the stated compensation strategy, independently or in conjunction with the Board, as appropriate. The Compensation Committee operates independently of management and in consultation with its compensation consultant.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis ("CD&A") for the year ended 31 December 2019 with management. In reliance on the reviews and discussions referred to above, the Compensation Committee recommended to the Board that CD&A be included in the Company's proxy statement on Schedule 14A for the Meeting to be filed with the SEC.
Submitted by the Compensation Committee:
Suzanne P. Nimocks, Chairman
William E. Albrecht
Thierry Pilenko
Paul E. Rowsey, III
Adam Weitzman
24 April 2020
In accordance with the recommendations of the Compensation Committee, our Board approved inclusion of CD&A in this proxy statement on 24 April 2020.


31




COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This CD&A describes our compensation practices and the executive compensation policies, decisions and actions of our Compensation Committee (the "Compensation Committee"). This CD&A focuses on compensation earned during 2019 by our Chief Executive Officer, Chief Financial Officer and the other executive officers listed as named executive officers ("NEOs") in our Summary Compensation Table. Our 2019 NEOs were as follows:
NEO
Title
Thomas P. Burke
President and Chief Executive Officer ("CEO")
Carl G. Trowell(1)
Executive Chairman
Jonathan Baksht
Executive Vice President and Chief Financial Officer ("CFO")
Gilles Luca
Senior Vice President and Chief Operating Officer ("COO")
Michael T. McGuinty
Senior Vice President, General Counsel and Secretary
Alan Quintero
Senior Vice President, Business Development
P. Carey Lowe(2)
Former Executive Vice President and Chief Operating Officer
John S. Knowlton(3)
Former Senior Vice President, Technical
(1)
Carl G. Trowell will step down as Executive Chairman at the end of the day on 30 April 2020 and will retire from the Board of Directors at the Meeting.
(2)
Effective 30 November 2019, P. Carey Lowe stepped down from his position as Executive Vice President and Chief Operating Officer, and effective 31 December 2019, he was no longer employed by the Company
(3)Effective 11 May 2019, John S. Knowlton resigned from his position as Senior Vice President, Technical
The Company has experienced significant stock price decline since the end of 2019, as have its peer companies and the broader energy industry as a whole, due largely to the recent precipitous decline in oil prices following a longer term downturn in the offshore drilling industry, the dramatic decline in global demand for oil and the economic uncertainties created by world efforts to control the spread of the COVID-19 pandemic. The Compensation Committee’s compensation decisions for 2019 described in this Proxy Statement were made before the onset of the COVID-19 pandemic and its attendant economic uncertainties. The Compensation Committee is currently evaluating the design of our executive compensation programmes for 2020 in light of these circumstances and the Company’s strategic priorities and has not generally addressed future changes that may be made to 2020 compensation programmes in this CD&A.
Executive Summary

Impact of Market Conditions on Strategy and Executive Pay
The offshore drilling industry is in the fifth year of a downturn that started with the 2014 drop in oil prices. During the downturn, our customers have significantly reduced their capital budgets, which reduced the demand for offshore drilling services. These challenging market conditions presented an opportunity to strategically reposition ourselves in the industry, which we achieved through significantly reducing our near-term debt maturities, achieving significant cost savings, acquiring Atwood Oceanics and executing the Rowan Transaction. The following timeline outlines key decisions and actions undertaken by the Company.

32



tiemlinea01.jpg

Difficult Market Conditions
● Crude oil prices were over $100 in the summer of 2014 and have ò 81% between 2014 and 14 April 2020(1)
● The precipitous drop in crude oil prices resulted in a significant reduction in the capital budgets for our customers, which led to a meaningful reduction in the demand for our services

● Average total shareholder return for Valaris and offshore drillers ò 98% since summer of 2014 and ò 90% since the Rowan Transaction (2)

● Bankruptcy or restructuring of over a dozen of our direct peers, including Paragon Offshore, Hercules, Seadrill, Ocean Rig, Pacific Drilling, Dolphin, Constellation, Schahin, Odebrecht, Japan Drilling, Oro Negro and Vantage

● Rig utilization around 69% in 2019 and day rates are ò45% since 2014 through 2019 (3)
(1)
Based on Cushing, OK WTI spot prices between 20 June 2014 and 2020 April 14; source: US Energy Information Administration
(2)
Total shareholder return for Valaris, Diamond Offshore, Noble Corp, and Transocean for the periods between 2014 June 20 and 2020 April 17 and between 2019 April 11 and 2020 April 17
(3)
Based on IHS Markit RigPoint data; rig utilisation and day rates reflect 2019 averages
Our Board and Management Team's Response to Challenging Market Conditions
Creation of Valaris
● Combination of leading offshore drilling companies Ensco and Rowan created largest offshore driller by fleet size, geographic presence and customer base

● $165 million annual synergies target

● Appointment of a new CEO (Mr. Burke) and the transition of our former CEO (Mr. Trowell) to Executive Chairman. Our Executive Chairman will step down from this position at the end of the day on 30 April 2020, and Mr. Rowsey will become our non-executive Chairman effective as of 1 May 2020.
Other Key Strategic Actions
● Announced a $100 million cost reduction plan above and beyond the $165 million in annual synergies

● Formation of a Finance Committee to assist in the oversight of our capital structure and financial strategies

● Refreshed Board of Directors by appointing three new directors (two of which replaced retiring directors and two additional directors will be stepping down at our Meeting)

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Compensation Programme Actions and Rationale
Pay Actions in Connection with the Merger Facilitated a Smooth Transition
Former CEO and Current Executive Chairman (Mr. Trowell):
● Executed smooth transition and integration through his Executive Chairman role

● Reduced ongoing target total direct compensation (“TDC”) by 82% through a 25% reduction in cash compensation and a $5 million payment to replace certain previously granted and future long-term incentive (“LTI”) awards

● Negotiated employment agreement included a £2 million severance payable upon his stepping down from the Executive Chairman role; however, as discussed below, the Company reduced Mr. Trowell's severance to £800,000 in connection with his 30 April 2020 separation, reflecting a 60% reduction

● Will receive an additional £3 million based on exceeding pre-defined synergy goals set in connection with the Rowan Transaction, following his stepping down from the Executive Chairman role

Current CEO (Mr. Burke):
● Held target TDC flat from prior years

● One-time $3.75 million cash payment as consideration for the waiver of certain change in control benefits (including single trigger vesting of previously granted RSUs) and relocation from the US to the UK, including associated cost of living and tax burden adjustments

● Mr. Burke did not receive LTI grants from Valaris in 2019

Select Market Adjustments for NEOs (other than for our CEO):
● Made market adjustments to target TDC to reflect the larger scale of the Company and executive roles following the Rowan Transaction

Other Actions:
● Tied 20% of the 2019 annual cash bonus to synergy goals

● Adopted an executive severance plan that provides benefits upon a qualifying termination, subject to the executive executing a release of claims and complying with restrictive covenants

● Froze the 2005 Supplemental Executive Retirement Plans ("SERP"), which provided additional tax-deferred savings for our NEOs, effective 1 January 2020

Compensation Programme Changes Align with Evolving Market Conditions
● CEO agreed to a voluntary 10% reduction in total compensation effective 1 January 2020

● 2019 performance unit awards are subject to a modifier based upon absolute total shareholder return (“TSR”) that caps payouts at target in the event of negative absolute TSR

● Executive Chairman agreed to significant reductions in his separation entitlements in connection with his 30 April 2020 termination of employment, including a reduction of £1.2 million of his previously-negotiated lump sum severance payment, waiver of any pro-rated 2020 Ensco Cash Incentive Program (“ECIP”) payment, waiver of acceleration of unvested equity awards and waiver of entitlement to up to 24 months of private medical insurance. Mr. Trowell's non-competition restricted period was extended from 1 year to 2 years, and he agreed to provide consulting services to the Chairman of the Board through 31 December 2020 for no additional remuneration


34



Our Executive Compensation Aligns with our Shareholders’ Experience

As referenced by the charts below, the compensation realised by Carl G. Trowell, our Executive Chairman and former CEO, and the payouts under our performance unit programme are aligned with our shareholders’ experience between 2017 and 2019.
stockv2a01.jpg

(1) 
Stock Price is adjusted for a 1:4 reverse stock split following the closing of the Rowan Transaction
(2) 
Mr. Trowell was hired in the U.K., is a U.K. citizen and resides in the U.K. and as such, his base salary and ECIP awards are paid in GBP. However, for disclosure purposes, his base salary and ECIP awards have been converted to USD, using the exchange rate of 1.277, which was the average rate during 2019.
(3) 
The target and realised values above exclude the retention payments made to the executive in 2017 and 2018 as they are not considered a part of ongoing compensation. The executive’s lower realised compensation during this period was a key consideration in approving the retention payments.
(4) 
Reflects the cash payment made in lieu of future equity awards and as consideration for the forfeiture of previously granted awards as voted on and approved by shareholders as part of the Rowan Transaction. The value of the award was averaged over the three-year period.

35




Definitions of Pay
Base Salary
ECIP
Performance Units
Restricted Stock/ Restricted Share Units
Other
Target
Actual paid
Target opportunity
Grant date (target) value of units granted during year
Grant date value of shares/units granted during year
Cash payment made in 2019 in lieu of future equity awards and as consideration for the forfeiture of previously granted awards
Realised
Actual paid
Actual paid for prior year performance
Market value of shares vested for performance through the end of the three year performance period
Market value of shares that vested during the year
Cash payment made in 2019 in lieu of future equity awards and as consideration for the forfeiture of previously granted awards
Best Practices: Characteristics of Our Compensation Programmes
Below are highlights of our 2019 practices and policies that serve as the foundation of our executive compensation programme. We believe the following items appropriately incentivise our executive officers, promote good corporate governance and are in the best interests of our shareholders:
What We Do
 
What We Don't Do
Vast majority of officer pay at-risk, based on financial and strategic performance and growth in long-term shareholder value
ü
 
Single-trigger change-in-control severance benefits or vesting of equity awards (except for certain legacy Rowan agreements)
x
Executive and director share ownership guidelines (including a 6X base salary multiple for our CEO)
ü
 
Pledging or hedging of Company stock
x
Minimum holding periods for vested stock and shares acquired under options until share ownership guidelines are met
ü
 
Buyouts of underwater stock option awards or repricing of stock option awards without shareholder approval
x
Compensation clawback that applies to equity awards
ü
 
Liberal share/option recycling
x
Independent compensation consultant
ü
 
Excise tax gross-ups
x
Annual compensation risk assessments
ü
 
Guarantees for salary increases
x
Granted 50% of Named Executive Officer 2019 LTI in the form of performance-based LTI (except for legacy Rowan 2019 LTI)
ü
 
 
 
Payouts under the 2019 performance units capped at target if absolute TSR is negative for the three-year performance period
ü
 
 
 

Strong Shareholder Support for 2019 Say-on-Pay
At our 2019 Annual General Meeting of Shareholders we received 97.5% shareholder support for our say-on-pay proposal. The Compensation Committee strongly values the opinions of our shareholders as expressed in the say-on-pay vote and believes that our 2019 support level demonstrates a strong alignment of our compensation programmes with our shareholders’ interests.


36



Although no specific changes were made to our 2019 compensation programme in light of this vote, the Compensation Committee will continue to consider the outcome of our future say-on-pay votes when making future compensation decisions for our NEOs.
What Guides Our Programme

Compensation Philosophy Overview
Our executive compensation philosophy is based on promotion of the following principles:
Strong financial performance;
creation of and preservation of a strong balance sheet;
industry leading safety performance;
operational efficiency (downtime reduction and safety);
customer satisfaction;
positioning assets in markets that offer prospects for long-term growth in profitability; and
strategic and opportunistic enhancement of our rig fleet.
We stress the importance of these principles through the structure of our executive compensation programme by placing the majority of executive pay at risk and subjecting a significant portion of each NEO's potential compensation to specific performance requirements.
We designed our executive compensation programmes for 2019 to accomplish the following primary goals:
Attract, retain and motivate highly qualified individuals capable of leading us to achieve our business objectives;
Pay for performance by providing competitive pay opportunities that result in realised pay which declines when we have poor financial performance and increases when we have strong financial performance; and
Ensure alignment with shareholders through long-term equity-based compensation and share ownership guidelines and associated holding requirements.
Our 2019 executive officer compensation is composed of three principal components: base salary, annual cash bonus and long-term incentives, each of which contributes to the achievement of our compensation programme goals, or TDC.
Principal Components of TDC
Primary Goals of our Executive Compensation Programme
Attract/ Retain/
Motivate
Pay for
Performance
Shareholder
Alignment
Base Salary
 Salary is an essential factor in attracting and retaining qualified personnel
ü
 
 
Annual Cash Bonus
   Provided to executive officers through the ECIP
 Awards are tied to achievement of specific annual financial, operational, safety and strategic team goals, all of which contribute to the creation of shareholder value
ü
ü
ü
Long-term incentives
 Provided through a combination of:
○ Restricted share units
○ Performance unit awards
Promotes alignment with shareholders by tying the majority of executive compensation to creation of long-term shareholder value and encouraging executives to build meaningful equity ownership stakes in the Company
ü
ü
ü


37



NEO Average Target Total Direct Compensation (1) 
neopaymixa04.jpg
82% of NEO compensation “at risk” and aligned with company and shareholder success
_______________
(1)
Reflects target total direct compensation (base salary, target bonus, and target LTI) for each NEO as of 31 December 2019 and includes only NEOs employed by the Company as of 31 December 2019.
(2)
Health, Safety, and Environment (HSE) consists of Process Safety (weighted 5% of the total bonus) and Total Recordable Incident Rate (weighted 5% of the total bonus)
Target Market Positioning
We generally target the 50th percentile of our competitive market for base salaries and target incentive opportunities. However, the Compensation Committee believes that our compensation programme’s structure should generally result in realised executive officer compensation that:
Exceeds the market median during periods of exemplary performance relative to our compensation peer group companies; and
Falls below the market median during periods of poor performance relative to our compensation peer group companies.
A review of our executive compensation programme performed by our independent compensation consultant, FW Cook, in November 2019 confirmed that target TDC for our NEOs as a group fell within the market median range.
Various factors may affect the relationship between target TDC and the market reference point for individual executives, including: retention concerns; tenure and job responsibilities; year-over-year volatility of market data; internal equity considerations; and differences in the strategic value of individual positions.
The Compensation Committee annually reviews the mix of base salary, cash bonus and long-term incentives. It does not target a fixed percentage allocation among the compensation elements, but generally aims to provide a significant

38



majority of NEO compensation opportunities in the form of incentive compensation with an emphasis on long-term incentives as shown above.
How We Make Compensation Decisions
Role of the Compensation Committee's Consultant
In carrying out its responsibilities for establishing, implementing and monitoring the effectiveness of our general and executive compensation philosophy, plans and programmes, our Compensation Committee relies on outside experts to assist in its deliberations. Until 11 April 2019, the date of the closing of the Rowan Transaction, the Compensation Committee received independent compensation advice and data from Pearl Meyer. Following the Rowan Transaction, the Compensation Committee retained FW Cook as its independent compensation consultant for the remainder of 2019. Prior to retaining FW Cook, the Compensation Committee assessed the independence of FW Cook pursuant to NYSE rules, and concluded that the retention of FW Cook raised no conflicts of interest.
Pearl Meyer and FW Cook were engaged by the Compensation Committee to provide counsel regarding:
Compensation philosophy and best practices;
Peer group composition;
Compensation programme design;
Short-term and long-term incentive plan administration;
Competitive compensation analyses for executive officers and non-executive directors; and
Trends in executive compensation.
Role of Management
The Compensation Committee also received data regarding compensation trends, issues and recommendations from management. In determining his recommendations for compensation for our executive officers other than the CEO, our CEO reviews market compensation information, including data provided to the Compensation Committee by its consultant, and individual performance factors and recommends compensation adjustments to the Compensation Committee. Mr. Trowell provided his recommendations to the Compensation Committee as to 2019 compensation levels for the other executive officers in early 2019.
The Compensation Committee charter provides for the CEO’s and Executive Chairman’s base salary, cash bonus, long-term incentive equity and performance-based compensation to be reviewed and approved by the Compensation Committee in consultation with and concurrence by all independent directors. Accordingly, our independent directors oversee and are actively engaged in the setting of the principal components of CEO and Executive Chairman compensation.
Compensation Peer Group
We compete for executive-level talent with oilfield service companies, as well as with other industries and professions. To provide guidance to the Compensation Committee, comparative salary data is obtained from several sources, including industry-specific surveys and compensation peer group company proxy statements.
Our current compensation peer group was approved by the Compensation Committee in May 2019 following the completion of the Rowan Transaction. In looking for potential peer companies, our Compensation Committee focused on companies with reasonably similar business characteristics, which included:
Size measured by revenue, assets and market value
Energy industry focus
Traded on a major stock exchange
Asset intensity
Multi-national with broad geographic reach

39



Offshore focus
Robust pay disclosure
Following our review, we selected the following companies:
criteriaa01.jpg
Company
Criteria Met
(# out of 9)
Noble Corp.
9
Transocean
9
Diamond Offshore
8
Hess Corp.
8
Kosmos Energy
8
Murphy Oil Corp.
8
National Oilwell Varco
8
Noble Energy
8
SBM Offshore
8
TechnipFMC
8
McDermott
7
Oceaneering Int'l
7
Talos Energy
7
Helmerich & Payne
6
Marathon Oil Corp.
6
Precision Drilling
6
KBR
5
Patterson-UTI Energy
5
Superior Energy Services
5
W&T Offshore
5
Given the complexity of our business, both in terms of our global footprint and our focus on the capital intensive offshore oil and gas market, we believe that it is critical to evaluate the competitiveness of our pay programmes relative to this group as opposed to a generic group of oilfield services companies whose business may be restricted to (or primarily focused on) the onshore U.S./North American oil and gas market.
The Compensation Committee, in consultation with FW Cook, reviews the compensation peer group annually to ensure that it provides an appropriate reference point in terms of the business focus and financial size of the companies in the group.
Compensation Peer Group Prior to the Rowan Transaction
Prior to the Rowan Transaction, our compensation peer group consisted of the following companies:
 2019 Compensation Peer Group (Prior to the Rowan Transaction)
Diamond Offshore
Helmerich & Payne
McDermott International
Noble Corp
Oceaneering International
Rowan Companies
Superior Energy Services
Transocean
Weatherford International
Performance Peer Group
Our performance peer group is used to measure relative total shareholder return performance under our performance unit programme. The performance peer group consists of companies who have international operations and are engaged in offshore drilling. We have selected these companies as performance peers due to similarity of business focus, capital structure and competitive conditions as well as the fact they are competitors within our industry. We

40



consider our performance peers to be companies with whom we compete for capital from the equity market and which our shareholders might consider as alternative investments. Our 2019 performance peer group consisted of the following companies:
2019 - 2021 Performance Peer Group
Borr Drilling
Noble Corp
Diamond Offshore
Pacific Drilling
Helmerich & Payne
Seadrill
Nabors
Transocean
Components of 2019 Compensation
Base Salary
The Compensation Committee elected to make the following changes to base salaries in 2019:
Messrs. Burke and Quintero joined Valaris following the Rowan Transaction; Mr. Burke’s initial base salary of $950,000 was established per his employment contract while Mr. Quintero’s salary was set in May 2019. Mr. Burke voluntarily elected to reduce his base salary by 10% from $950,000 to $855,000 effective as of 1 January 2020.
Mr. Trowell’s base salary was reduced in 2019 in connection with his transition from CEO to Executive Chairman.
Messrs. Baksht’s and McGuinty’s base salaries were increased by 8% and 4%, respectively, following the Rowan Transaction to reflect the larger scale of the Company and each executive’s expanded role.
Mr. Luca’s base salary was increased, effective December 2019, in connection with his promotion to COO.
NEO
Salary as of 1 January 2019
Salary as of 1 January 2020
Percent Change
Thomas P. Burke(1)
Not Applicable
$855,000
Not Applicable
Carl G. Trowell(2)
£600,000
£450,000
-25%
Jonathan Baksht
$510,000
$550,000
8%
Gilles Luca
$450,000
$525,000
17%
Michael T. McGuinty
$490,000
$510,000
4%
Alan Quintero
Not Applicable
$415,000
Not Applicable
P. Carey Lowe
$620,000
Not Applicable
Not Applicable
John S. Knowlton
$450,000
Not Applicable
Not Applicable
____________________
(1)
Mr. Burke voluntarily elected to reduce his base salary by 10% from $950,000 to $855,000 effective 1 January 2020 in light of challenging industry conditions, which, in turn, proportionately reduced Mr. Burke's 2020 target short-term and target long-term incentive awards.
(2)
Mr. Trowell was hired in the U.K, is a U.K. citizen and resides in the U.K. and as such his base salary and ECIP awards are paid in GBP.
In February 2020, the Compensation Committee elected to increase Mr. Quintero’s base salary to $460,000 in recognition of the increased scope of his job and to better align his compensation with current market practices. The base salaries for all other executives were held flat.
2019 Short-Term Incentive Plan
A significant portion of NEO bonus compensation is tied to the performance of the executives as a group. Performance is measured against pre-established annual financial goals and non-financial goals, including safety performance and strategic team goals.

41



2019 Financial and Operational Performance Measures and Weightings
The Compensation Committee administered the ECIP bonus awards for 2019 through the application of pre-established performance measures. Bonus payouts were formula-derived and based upon achievement of the following five pre-established performance measures and weightings:
Metric
Weighting
Rationale and Description
Adjusted EBITDA (1)
40%
● Key measure of profitability
● Highest weighting in bonus programme to reflect strategic importance
Synergies
20%
● Keeps management focused on realising and achieving the financial benefits from the Rowan Transaction
● Measured based on annualised run rate as of 1 January 2020 and includes support cost and contract drilling synergies
HSE
Process Safety Index Rate (2)
TRIR (3)
10%
● Industry leading safety performance is one of our key business objectives
● Process Safety Index Rate (“PSI”) focuses on preventing catastrophic events such as loss of well control, fire or explosion, uncontrolled release of fluids or energy, structural failure, and loss of rig power, positioning or stability
● Total Recordable Incident Rate (“TRIR”) measures the aggregate number of work-related injuries or illness
Downtime
10%
● Downtime measures refer to any period when one of our rigs is under contract but not operational due to equipment failure or other unplanned stoppage attributable to us, resulting in a reduced or zero day rate revenue. 
● This is a key metric that measures our ability to efficiently monetise our backlog and avoid costly contractual loss of revenue associated with downtime.
Strategic Team Goals (STGs)
20%
● Included to ensure management maintains focus on medium-term strategic objectives in addition to short-term goals. Achievement relative to these goals is imperative to achievement of sustainable, profitable growth beyond the current year.
● The successful integration of legacy Rowan and Ensco was critical to our success as an organisation in 2019 and beyond. As a result, the entire 20% of the executives’ STGs were tied to merger integration milestones. Each functional area of the Company was given specific merger-related integration milestones.
● Payouts under this portion of the ECIP were determined based on the average achievement across all functional areas. In determining the respective payouts below, we evaluated the relative difficulty of the milestones and determined that 90% achievement reflected a rigorous target for the organisation.
● 3: Achieve 100% of the milestones resulting in a 150% payout
● 2: Achieve 90% of the milestones resulting in a 100% payout
● 1: Achieve 75% of the milestones resulting in a 50% payout
● 0: Achieve less than 75% of the milestones resulting in no payout
(1)
For purposes of the ECIP, EBITDA performance metric includes Valaris EBITDA and 50% of ARO EBITDA. Valaris defines “Adjusted EBITDA” as net loss from continuing s net loss from continuing operations, other income (expense), income tax expense (benefit), interest expense, depreciation, amortisation, loss on impairment, equity in earnings of ARO, (gain) loss on asset disposals, transaction costs and significant non-recurring items.
(2)
PSI is a safety performance metric that is determined by taking the aggregate number of process safety incidents above a certain severity level for every 200,000 employee hours worked.
(3)
We calculate TRIR based upon the guidelines set forth by the IADC, an industry group for the drilling industry. The IADC methodology calculates TRIR by taking the aggregate number of occurrences of work-related injuries or illnesses for every 200,000 employee hours worked.

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Actual 2019 Performance
Following the completion of the Rowan Transaction, the Compensation Committee adopted the scorecard below, which aligned with the Company’s key business objectives and budget for 2019. The Compensation Committee undertook a thorough goal-setting process which evaluated the potential risks and opportunities for the business. For certain metrics (e.g., EBITDA), this review process resulted in us setting target goals that were lower than our prior year’s actual performance; however, we believed that these goals were appropriate and sufficiently rigorous given the challenges facing the offshore drilling industry. As further evidence of the rigor of our goals, the Company’s 2019 EBITDA performance still fell short of the Committee’s $220M target and the NEOs earned below-target payouts for this portion of the annual incentive plan.
As summarised in the table below, a formulaic review of our 2019 performance relative to pre-established goals resulted in a determination by the Compensation Committee that the overall formula-derived bonus achievement was 116.3% of target.
Performance Measure
2019 Performance Goals
Actual Performance
 
Resulting % of Target Earned
 
Weighting
 
Weighted % of Target Earned
Threshold
Target
Maximum
 
x
 
EBITDA (000s)
$175,000
$220,000
$255,000
$205,700
 
84.10%
 
40%
 
33.6%
Synergies (000s)
$101,800
$121,800
$141,800
$132,000
 
151.0%
 
20%
 
30.2%
PSI
0.15
0.10
0.08
0.03
 
200.0%
 
5%
 
10.0%
TRIR
0.40
0.35
0.30
0.28
 
200.0%
 
5%
 
10.0%
Downtime - Floaters
4.50%
3.50%
3.00%
4.12%
 
69.0%
 
5%
 
3.5%
Downtime - Jackups
2.10%
1.60%
1.35%
1.61%
 
99.0%
 
5%
 
5.0%
STGs
1.00
2.00
3.00
2.402
 
120.1%
 
20%
 
24.0%
TOTAL
 
 
 
 
 
 
100%
 
116.3%

Assessment of 2019 STGs
Each of our 23 functional areas was assigned specific merger-related integration milestones. The Named Executive Officers achievement was tied to the average achievement of all of the functional areas.

In 2019, the Company achieved 94.0% percent of its merger-related integration milestones. This corresponded to a STG score of 2.402, which resulted in a 120.1% payout
a2019stgsmilestones.jpg


43




Individual Award Calculation
NEO
2019 Target Opportunity (% of Salary)
2019 Target Opportunity ($)(1)
x
ECIP Payout %
+
Discretionary
Adjustment
=
Formula-Derived ECIP Award
Thomas P. Burke
110%
$758,699
 
116.3%
 
0
 
$882,367
Carl G. Trowell (2)
110%
£540,206
 
116.3%
 
0
 
£628,260
Jonathan Baksht (3)
83%
$442,885
 
116.3%
 
0
 
$515,075
Gilles Luca (4)
80%
$367,326
 
116.3%
 
0
 
$427,200
Michael T. McGuinty (3) (5)
76%
$381,110
 
116.3%
 
$175,000
 
$618,231
Alan Quintero (3) (6)
64%
$199,908
 
116.3%
 
$50,000
 
$282,493
P. Carey Lowe
90%
$558,000
 
116.3%
 
0
 
$648,954
John S. Knowlton
70%
$112,192
 
116.3%
 
0
 
$130,479
____________________
(1)
Target bonus opportunities pro-rated to reflect compensation adjustments, as applicable, as well as the effective date of the Rowan Transaction with respect to Messrs. Burke and Quintero and termination date with respect to Mr. Knowlton.
(2)
Mr. Trowell was hired in the U.K., is a U.K. citizen and resides in the U.K. and as such his ECIP target opportunity and actual ECIP award are denominated in GBP.
(3)
Bonus targets were adjusted following the Rowan Transaction to reflect the larger scale of the Company and certain executives' expanded roles (from 80% to 85% for Mr. Baksht, from 70% to 80% for Mr. McGuinty, and from 55% to 70% for Mr. Quintero).
(4)
Mr. Luca's bonus target increased from 80% to 85% following promotion to COO effective 1 December 2019.
(5)
In recognition of his contributions toward the achievement of the Company's strategic objectives, including his work reaching a settlement with Samsung Heavy Industries, in which the Company received a $200 million cash payment, the Compensation Committee increased the formula-derived bonus for Mr. McGuinty by $175,000.
(6)
In recognition of his contributions toward the achievement of the Company's strategic objectives, the Compensation Committee increased the formula-derived bonus for Mr. Quintero by $50,000.

44



2019 Long-Term Incentives
Our 2019 approach to long-term incentive compensation included a combination of time-vested and performance-based awards, as shown in the table below.
Long-Term Incentive Approach
Vehicle
Description
Percent of Target annual grant date value
Restricted Share Units
● Awards vest ratably in annual installments over three years.
● Consistent with our general practices (and those among our peer group companies) unvested restricted shares and restricted share units have dividend rights or dividend equivalent rights. Unvested restricted shares have voting rights on the same basis as outstanding shares.
50%
Performance Units
● Performance unit awards are earned and vest based on relative TSR (as described in greater detail later in this section) at the end of a three-year performance period subject to an absolute TSR modifier that caps payouts at target if absolute TSR is negative during the performance period.
   Awards were denominated in cash to minimise shareholder dilution and will be paid in cash, but the Compensation Committee retains the discretion to use cash or shares for these awards in future years.
50%
2019 LTIP Awards
The Compensation Committee elected to make the following changes to LTI targets:
Messrs. Burke and Quintero joined Valaris following the Rowan Transaction; Mr. Quintero received a supplemental LTI grant in 2019 in exchange for his forfeited equity under his legacy Rowan change-in-control agreement.

Mr. Trowell waived his 2019 LTI grant and right to future LTI grants in exchange for a $5,000,000 payment per the terms of his employment agreement at the time of the Rowan Transaction.
Mr. Baksht’s and Mr. McGuinty’s LTI targets were increased following the completion of the Rowan Transaction to reflect the larger scale of the Company and each executive’s expanded role.
Mr. Luca’s LTI target was increased in connection with his promotion to COO in December of 2019.
NEO
LTI Target for 2019 LTI Grant
Thomas P. Burke
Not Applicable
Carl G. Trowell
$5,000,000
Jonathan Baksht
$1,350,000
Gilles Luca
$1,350,000
Michael T. McGuinty
$1,200,000
Alan Quintero(1)
Not Applicable
P. Carey Lowe
$2,000,000
John S. Knowlton
$1,200,000
____________________
(1)
Although Mr. Quintero did not receive an annual award under our LTI program for 2019 in light of the timing of his joining the company upon the closing of the Rowan Transaction, he did receive an award of 98,775 restricted stock units in exchange for the termination of his legacy Rowan change in control agreement in June of 2019.



45



Performance Unit Award Design
Performance unit awards granted in 2017, 2018 and 2019 under the LTIP are earned based upon Company performance over a three-year measurement period, using pre-determined relative measures, as shown in the table below.
Long-term Performance Plan Cycles
Grant Cycle
2017
2018
2019
2020
2021
2017 - 2019 Grant
X
 
 
Earned at 72% of target value
 
2018 - 2020 Grant
 
X
 
 
 
2019 - 2021 Grant
 
 
X
 
 
 
 
 
 
 
 
 
 
Grant cycle
 
 
 
 
X
Grant date
 
 
 
 
 
 
 
 
 
Grants of 2019-2021 Performance Unit Awards
Awards for the 2019 to 2021 performance period are based on our total shareholder return relative to our performance peers.
Relative Performance Measure Payout
(2019 - 2021 Performance Units)
 
 
Valaris
Rank Against Peers
 
2019 - 2021 Award
Multiplier
(8 peers)
 
1
 
2.00
 
2
 
2.00
 
3
 
1.67
 
4
 
1.33
 
5
 
1.00
 
6
 
0.75
 
7
 
0.50
 
8
 
0.00
 
9
 
0.00
 
In addition, our 2019 awards will be subject to a modifier based upon absolute TSR performance over the period in which payouts will be capped at target if absolute TSR is negative:
Absolute TSR over
3-Year Performance Period
Absolute TSR Collar
Payout Terms
Negative
Payout capped at 100% of Target
>= 10% annualised
Payout of no less than threshold
For more detailed information, refer to the Grants of Plan-Based Awards Table and related footnotes. All 2019 restricted share unit and performance unit awards granted under the LTIP to our NEOs are reported in the "Grants of Plan-Based Awards Table."

46



Payouts of 2017 - 2019 Performance Awards
Awards for the 2017 - 2019 performance period were subject to vesting based on our TSR and return on capital employed (ROCE) performance relative to peers. For purposes of the 2017 awards, the peer group consisted of the following companies:
2017 - 2019 Performance Peer Group
Atwood Oceanics(1)
Noble Corp
Diamond Offshore
Rowan Companies(1)
Helmerich & Payne
Seadrill
Nabors
Transocean
(1)Atwood Oceanics and Rowan Companies were each removed from the performance peer group following our mergers with them.
These awards were granted in early 2017 and were measured over the three year performance period. The awards were paid in cash in March 2020. The tables below summarise the calculation of final payout for those awards:
Performance Measure
 
Actual Performance
 
Corresponding Multiplier
 
Weight
 
Weighted Average Multiplier
 
=
Relative TSR
 
6 of 7
 
0
 
 
 
50
%
 
 
%
 
Relative ROCE
 
3 of 7
 
1.44
 
 
 
50
%
 
 
72
%
 
TOTAL
 
 
 
 
 
 
 
72
%
 

___________
NEO
2017 - 2019 Performance Unit Awards
Target Value
 
Weighted Average Multiplier
 
Total Value of Performance Units Earned
x
 
=
Carl G. Trowell(1)
$
2,500,000

 
%
 
 
 
$

 
Jonathan Baksht
$
675,000

 
72
%
 
 
 
$
486,000

 
Gilles Luca
$
675,000

 
72
%
 
 
 
$
486,000

 
Michael T. McGuinty
$
600,000

 
72
%
 
 
 
$
432,000

 
P. Carey Lowe(2)
$
1,000,000

 
%
 
 
 
$

 
John S. Knowlton(3)
$
600,000

 
100
%
 
 
 
$
600,000

 
(1) 
Mr. Trowell agreed to forfeit his 2017, 2018 and 2019 performance awards and 2019 share awards in exchange for a payment of $5,000,000 upon closing of the Rowan Transaction. See "Summary Compensation Table"
(2) 
Mr. Lowe forfeited his 2017, 2018 and 2019 performance awards, restricted share awards and restricted share units upon loss of office as Executive Vice President and Chief Operating Officer.
(3) 
The 2017 awards held by Mr. Knowlton were modified to accelerate full vesting and to pay the target amount upon his separation from the Company.

2020 Targeted Performance Cash Bonuses
In February 2020, our Board approved the grant of performance-based cash retention payments to each of Messrs. Baksht and McGuinty, in the amounts of $550,000 and $510,000, respectively. Each of the retention payments will be paid in two, equal installments subject to such officer’s continuous employment through each payment date. The first installment is scheduled to be paid within thirty days following 1 June 2020. The second installment will be paid upon the Company's successful completion of certain strategic performance objectives with such payment made within thirty

47



days following action by the Compensation Committee and the Finance Committee of the Board to approve the completion of such objectives.
Other Executive Compensation Matters

Share Ownership Guidelines
Intended to further encourage accumulation of share ownership, NEOs, within five years of being appointed to their position, are required to own shares having a value of at least:
CEO: 6x base salary
EVPs: 2x base salary
Other NEOs: 1x base salary
Officers who are not in compliance with the ownership requirements under the guidelines are required to retain any after-tax proceeds from vesting of shares or exercise of stock options in the form of shares until compliance is achieved. The guidelines are included in our Corporate Governance Policy. Each of our NEOs was in compliance with the share ownership guidelines at the end of 2019.
Clawbacks and Award Disqualifications
We have clawback provisions in our long-term incentive award agreements and award disqualification measures in the LTIP and the ECIP. Using this authority, the Compensation Committee may seek to claw back or reduce equity incentive awards or reduce the size of cash incentive awards for executive officers who violate our Code of Business Conduct or in the case of certain financial restatements (including application of the provisions of the Sarbanes-Oxley Act of 2002, as amended, in the event of a restatement of our earnings).
Compensation Risk
The Compensation Committee carefully considers the relationship between risk and our overall compensation policies, programmes and practices for executive officers and other employees. The Compensation Committee continually monitors the Company's general compensation practices, specifically the design, administration and assessment of our incentive plans, to identify any components, measurement factors or potential outcomes that might create an incentive for excessive risk-taking detrimental to the Company. The Compensation Committee has determined that the Company's compensation plans and policies do not encourage excessive risk taking.
The Compensation Committee also paid particular attention to potential unintended consequences associated with establishment of the ECIP and performance unit award goals and related measurement criteria. In formulating such goals and performance criteria, the Compensation Committee focused on matters such as safety performance, financial performance, relative TSR, relative ROCE and STGs. The Compensation Committee determined that such goals and performance criteria did not encourage participation in high-risk activities that are reasonably likely to have a material adverse effect on the Company.
Hedging Policy
We have a Securities Trading Policy that specifically prohibits directors, NEOs and certain other employees from engaging in short-sales of the Company's shares, engaging in any hedging transactions of any kind related to our securities, and purchasing shares through a margin account. Due to the difficulty in monitoring compliance with a company-wide hedging prohibition and the relatively smaller share holdings of our employees generally, we do not prohibit hedging transactions by other employees that are not subject to the anti-hedging provisions of our Securities Trading Policy.

48



Pledging Policy
The Company has a policy prohibiting officers and directors from pledging Company shares. The Compensation Committee requires that the officers and directors confirm annually that they do not hold shares subject to a pledging arrangement. None of our officers or directors hold shares subject to a pledging arrangement.
Tax Deductibility of Compensation
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended ("Section 162(m)") generally disallows a U.S. federal income tax deduction to any publicly-held corporation for compensation paid in excess of $1.0 million in any taxable year to any "covered employee", which generally includes our NEOs.  Prior to the enactment of the Tax Cuts and Jobs Act of 2017 (the “Act”), performance-based compensation was not subject to this limit on deductibility so long as such compensation met certain requirements, including shareholder approval of material terms.  Prior to 2018, the Compensation Committee historically considered the implications of Section 162(m) and generally preferred to grant performance-based awards that were expected to be fully deductible where doing so furthered the purposes of our executive compensation philosophy.
Under the Act, the performance-based compensation exemption under Section 162(m) has generally been eliminated for new awards, meaning that formerly-deductible components of compensation will not be deductible going forward. Under the transition rules for the Act, certain performance-based awards granted prior to 2 November 2017 (such as the performance awards and ECIP awards granted to our covered employees prior to such date), may still qualify for the performance-based compensation exemption under Section 162(m).  The Compensation Committee remains committed to paying performance based compensation and will continue to seek to minimise the tax impact of compensation on the Company wherever that minimisation does not conflict with our overall executive compensation philosophy. No assurance, however, can be given that any future compensation paid will qualify for the transition relief or otherwise be deductible and the Committee expects certain compensation paid to covered employees to be non-deductible. 
Benefits
We offer health and welfare and retirement savings programmes to all eligible employees. Our executive officers and management generally are eligible for the same benefit programmes and on the same basis as our other employees. The health and welfare programmes are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. The health and welfare programmes we offer include medical, wellness, pharmaceutical, dental, vision, life insurance and accidental death and disability insurance. We also offer the U.S. taxpaying employee participants in our health and welfare programme the option of participating in flexible spending accounts, thus permitting deferral of pre-tax dollars for use in paying qualified medical and childcare expenses.
Executive officers may participate on the same basis as other employees in the employer matching provisions of our defined contribution savings plans on a tax-deferred basis. For 2019, the maximum total matching contribution available to executive officers and other employees who participated in the Ensco Savings Plan (a qualified 401(k) plan), SERP, Ensco Multinational Savings Plan or the Ensco Limited Retirement Plan was 5% of eligible salary. The matching contributions to our NEOs are reported in the "All Other Compensation" column of the Summary Compensation Table.
The SERP was created to provide an additional tax-deferred savings vehicle for certain highly-compensated employees, including our NEOs, whose participation in the 401(k) savings plan features of the Ensco Savings Plan was restricted due to contribution limitations of the U.S. Internal Revenue Code of 1986, as amended. Executive officers who participate in the SERP could elect to defer a portion of their base salary and/or annual cash bonus payments up to a percentage specified annually by our Compensation Committee and ratified by our Board. For 2019, the maximum salary deferral was 50%, inclusive of the 5% 401(k) contribution, and 100% of the annual ECIP bonus payments made in 2019, consistent with prior years.
The SERP is administered by a third party, and deferred compensation may be invested in authorised funds similar to the investment options available under the Ensco Savings Plan. Investments also may be made in funds or publicly-traded securities on a self-directed basis. The SERP was frozen to new participants in November of 2019 and frozen to new contributions effective 1 January 2020. Additional information regarding deferred compensation of our NEOs is reported in the table entitled "Nonqualified Deferred Compensation."



49



Legacy Rowan Retirement Plans
Mr. Burke and Mr. Quintero are participants in certain legacy Rowan Retirement Plans. These plans consist of a generally available defined contribution 401(k) plan (the “Rowan Savings Plan”) which provides a cash company match of up to 100% of the first 6% of eligible salary contributed by the employee, including executives, and a frozen defined benefit plan (the “Rowan Pension Plan”). Additionally, a frozen benefit restoration plan of Rowan Companies, Inc. (the “Rowan SERP”) provided additional retirement benefit accrual opportunities for NEOs to mitigate the effects of legal limitations on retirement benefits under the Savings Plan and the Pension Plan.
Mr. Burke’s Employment Agreement
In connection with his appointment as President and CEO upon the Closing of the Rowan Transaction, Mr. Burke entered into an employment agreement with Rowan Companies Inc., ENSCO Global Resources Limited and Valaris plc (the “Burke Employment Agreement”). The Burke Employment Agreement provides that Mr. Burke will serve as CEO for a term of two years commencing on 11 April 2019 and automatically renews thereafter for successive 12-month periods absent 90 days’ prior notice of nonrenewal.
Cash & Equity Compensation.  The Burke Employment Agreement provides for an initial, annual base salary of $950,000, which he elected to reduce to $855,000 effective 1 January 2020, and an annual target bonus of 110% of base salary. Subject to the approval of the Board or the Compensation Committee, for the first two years of the term, Mr. Burke will be entitled to awards under the Company’s long-term incentive award plans with a target award level of no less than 500% of his base salary, which percentage may be increased or decreased in future years as determined by the Board or the Compensation Committee.
Benefits. Mr. Burke is eligible to participate in employee benefit plans, programmes and arrangements of the Company, including the Company’s expatriate assignment and tax equalization policy in light of Mr. Burke’s required relocation to London, England. Mr. Burke also received benefits under the Company’s relocation policy, including a payment of $20,000 to help cover his relocation expenses.
Payment in Lieu of Single Trigger Vesting. In consideration of Mr. Burke’s (1) waiver of single trigger vesting for certain equity awards previously granted to him, (2) waiver of certain change in control and good reason rights pursuant to his existing compensation arrangements, and (3) the cost of living and tax burden associated with his relocation from the United States, Mr. Burke received a one-time payment of $3,750,000. This payment is subject to pro-rata reimbursement should Mr. Burke resign without good reason or be terminated for cause prior to April 11, 2022.
Severance Payments and Benefits. In the event of a termination of Mr. Burke’s employment without cause or his resignation for good reason, subject to his execution of a customary release, he will be entitled to (1) a lump sum payment equal to two times his base salary, (2) a lump sum payment equal to two times the greater of his average annual bonus over the three calendar years preceding his termination or his target annual bonus amount, (3) a pro-rated bonus for the year of termination, (4) subsidised medical, dental and vision coverage for a 24-month period, (5) reimbursement of costs incurred to relocate to the United States, and (6) accelerated vesting of outstanding equity awards. The Burke Employment Agreement also includes customary non-solicitation, non-competition, non-disparagement, confidentiality and intellectual property assignment provisions.
Mr. Trowell's Employment Agreement
Concurrently with the execution of the transaction agreement with Rowan, Mr. Trowell entered into an employment agreement with ENSCO Services Limited (the "Trowell Employment Agreement"). The Trowell Employment Agreement originally provided that Mr. Trowell would serve as Executive Chairman for a term of eighteen months commencing on 11 April 2019, but was amended in April of 2020 to provide that his term as Executive Chairman and employment with the Company will end at the end of the day on 30 April 2020. Mr. Trowell's non-competition restricted period was extended from 1 year to 2 years, and he agreed to provide consulting services to the Chairman of the Board through 31 December 2020 for no additional remuneration. Mr. Trowell will not stand for re-election to the Board at the Meeting.
Cash Compensation; ECIP; LTIP.  The Trowell Employment Agreement provides for an annual base salary of £450,000 (£150,000 less than his 2018 level) and specifies that Mr. Trowell will be eligible to participate in the ECIP. His threshold, target and maximum level of bonus opportunity under such plan equals 55%, 110% and 220%, respectively, of Mr. Trowell's base salary (consistent with his 2018 ECIP opportunity). In connection with his separation, Mr. Trowell will forfeit his pro-rated ECIP payment for 2020 and any unvested equity

50



awards.
Payment in Lieu of Future Equity Awards.  As a consequence of Mr. Trowell's loss of office as President and Chief Executive Officer in connection with the Rowan Transaction, Mr. Trowell waived his 2017, 2018 and 2019 unvested cash performance unit awards and his 2019 unvested restricted share units exchange for payment of $5,000,000.
Benefits.  Mr. Trowell was eligible to participate in the same benefit plans and programmes in which other executive non-expatriate employees who are based in the United Kingdom are eligible to participate. Since Mr. Trowell was not be eligible to participate in the retirement plans in which U.S.-based employees participate, Mr. Trowell was also eligible to receive cash payments equal to the cash amounts that would have been contributed by ENSCO Services Limited on Mr. Trowell's behalf to such retirement plans had he participated in such plans.
Severance Payments and Benefits.  In connection with the termination of Mr. Trowell’s employment as Executive Chairman, Mr. Trowell will receive (i) a lump sum severance payment of £800,000 (which amount reflects a 60% reduction from his severance entitlement under his employment agreement entered into upon closing of the Rowan Transaction, and which will be payable within 14 days following 30 April 2020, and (ii) an additional lump sum of £3,000,000 in connection with exceeding pre-defined synergy targets set in connection with the Rowan Transaction (which amount will be payable within 14 days following 30 April 2020). Mr. Trowell has agreed to waive his right to receive private medical insurance for a period of up to twenty-four months following the termination date.
Mr. Knowlton’s Separation Agreement
On 11 April 2019, Mr. Knowlton entered into a letter agreement with Ensco Corporate Resources LLC (the “Knowlton Separation Agreement”) that provided for Mr. Knowlton’s termination of employment effective as of 11 May 2019, in connection with the Rowan Transaction.  Consistent with the level of payments and benefits that would have been provided under Mr. Knowlton’s Change in Control Severance Agreement with us, the Knowlton Separation Agreement provided that Mr. Knowlton would receive: (1) a lump sum cash severance payment of $765,000, (2) a pro-rata annual bonus for the 2019 calendar year based on his period of employment with the company during 2019, (3) accelerated vesting of 100% of his time-based equity awards granted in or prior to 2018 and a pro-rata portion of time-based awards granted in 2019 based on his period of employment with the company during the vesting period, (4) accelerated vesting, at target, of all performance unit awards granted in 2017 and 2018 and a pro-rata portion of performance unit awards granted in 2019, and (5) subsidised group health plan coverage for up to one year.  Mr. Knowlton agreed to comply with various restrictive covenants and executed a general release of claims as consideration for the Knowlton Severance Agreement.
Mr. Lowe’s Separation and Consulting Agreements
On 2019 December 31, Mr. Lowe entered into a severance agreement (the “Lowe Separation Agreement”) with ENSCO Global Resources Limited and a consulting agreement with ENSCO Incorporated (the “Lowe Consulting Agreement”, together with the Lowe Separation Agreement, collectively the “Lowe Agreements”). Under the Lowe Agreements, Mr. Lowe received: (1) a lump sum cash severance payment of $2,300,000, (2) his earned annual bonus for the 2019 calendar year of $648,954, (3) tax assistance in connection with his period of service in the United Kingdom, (4) subsidised group health plan coverage for up to one year, and (5) a lump sum payment of $56,000. All of Mr. Lowe’s unvested equity-based awards were forfeited effective 31 December 2019. Under the Lowe Agreements, Mr. Lowe has also agreed to provide transitional support and consulting services to the Company through 2020 December 31 and will receive monthly payments of $98,167 in exchange for such services. Mr. Lowe agreed to comply with various restrictive covenants and executed a general release of claims as consideration for the Lowe Separation Agreement.The Company has determined to terminate the Consulting Agreement and pay out the unpaid consulting fee in accordance with the terms thereof in exchange for a further release of claims.
Executive Severance Plan
The Company adopted an Executive Severance Plan (the “Severance Plan”) effective 10 November 2019. The Severance Plan provides eligible individuals, including each of the Company’s Senior Vice Presidents and Executive Vice Presidents, with the following separation payments and benefits in the event of a qualifying termination, subject to the executive executing and not revoking a release of claims and complying with certain restrictive covenants:

51



For qualifying terminations occurring on or prior to 4 April 2020, cash severance in an amount equal to 100% (for Senior Vice Presidents) or 200% (for Executive Vice Presidents) of the sum of the executive’s annual base salary and target annual bonus opportunity;
For qualifying terminations occurring after 4 April 2020, cash severance in an amount equal to 100% (for Senior Vice Presidents) or 150% (for Executive Vice Presidents) of the executive’s annual base salary;
A pro-rated annual bonus for the year of termination (based on actual performance);
Forfeiture of all outstanding restricted share units, restricted shares and cash performance units granted prior to the effective date of the Severance Plan;
Accelerated vesting of all outstanding restricted share units and restricted shares granted following the effective date of the Severance Plan;
Accelerated vesting of a pro-rata portion of outstanding cash performance units granted following the effective date of the Severance Plan based on actual results realised; and
Continued group health plan coverage (or a cash payment equivalent thereto) and eligibility to receive outplacement services for a period of twelve months.
Perquisites and Other Personal Benefits
In conformity with our Compensation Committee's philosophy, and except with regard to the redomestication benefits described herein, our executive officers receive only limited perquisites. Other than in connection with qualifying terminations of employment, our executive officers are eligible to receive company-paid or company-subsidised life insurance, medical and disability coverage on the same basis as our other employees.
Overseas Allowances and Reimbursements
We redomesticated from the U.S. to the U.K. during 2009. As part of the redomestication, the Compensation Committee approved overseas allowances and reimbursements for our executive officers who were given expatriate assignments in London. Since 2009, the Compensation Committee has annually reviewed and approved these allowances and reimbursements.
The table below provides a summary of the 2019 overseas allowances provided to executives appointed to London (Messrs. Burke, Baksht and Lowe).

Primary Components of Our Overseas Allowance
Provided to Executives Appointed to London
Monthly housing allowance
YES
Foreign service premium
NO
Cost of living allowance
YES
Monthly transportation allowance
NO
Annual vacation allowance
YES
Dependent tuition allowance
YES
Tax Equalisation
PARTIAL(1)
___________________
(1)  
The London-based executive expatriate package provides tax equalisation on housing allowances and non-cash expatriate benefits, such as dependent tuition allowance.

52



A non-U.S. expatriate package is provided to our Senior Vice President - COO, Gilles Luca, in connection with his assignment in Houston, Texas. The main components of the 2019 allowances and reimbursements provided to Mr. Luca consist of the following:
Monthly housing allowance;
Foreign service premium;
Utility reimbursement;
Company provided vehicle;
Tax equalisation such that the expatriate is subject to 22% hypothetical tax withholding; and
Annual vacation allowance.
The amounts of the overseas allowances and reimbursements provided to our NEOs during 2019 are included in the "All Other Compensation Table".
The Compensation Committee believes that the overseas allowances and reimbursements are consistent with the philosophy and objectives of our executive compensation programme, for the following reasons:
They are primarily "make-whole" payments, not designed to increase the executive's wealth. They keep the executive in the same financial position as if he had not been asked to relocate. After the executive's expatriate assignment ends, the overseas allowances and reimbursements end, except in the case of tax equalisation payments, which continue only to the extent that the executive's tax liabilities continue in the jurisdiction of his or her assignment.
They are consistent with expatriate packages paid to other employees - at Valaris and at other companies. We pay similar overseas allowances and reimbursements to our other salaried employees who accept expatriate assignments. Our peer group companies who have redomesticated have paid similar allowances and benefits to executives and salaried employees, as have companies outside our peer group that have redomesticated to the U.K. and similar jurisdictions. Its compensation consultant reports to the Compensation Committee periodically on trends in overseas allowances and reimbursements, allowing us to ensure that our allowances and reimbursements are in line with prevailing competitive practices.
They promote stability among our executive management team, some of whom may decide to take positions with companies based in or near their home jurisdiction if relocating would put them at a significant financial disadvantage.
They maintain the alignment of the executive officers' interests with those of our shareholders as to the location of our corporate domicile, making the executive indifferent from a compensation perspective to the financial and personal aspects of relocation to our headquarters.
The overseas allowances and reimbursements remain subject to continued periodic review by the Compensation Committee to ensure that they are appropriate on an individual basis and as a whole and that they remain consistent with prevailing competitive practices and the philosophy and objectives of our compensation programme.



53



EXECUTIVE COMPENSATION
Summary Compensation Table

The table below summarises the total compensation paid or awarded to each of our NEOs for the fiscal years ended 31 December 2019, 2018 and 2017:
Summary Compensation Table
Name and Principal Position
 
Year
 
Salary
($)(1)
 
Bonus ($)(2)
 
Share Awards
($)(3)
 
Non-Equity
Incentive Plan
Compensation
($)(4)
 
Change in Pension Value and NQDC Earnings(5)
 
All Other
Compensation
($)(6)
 
Total
($)
Thomas P. Burke
President and Chief Executive Officer
 
2019
 
676,927

 

 

 
882,367

 
167,766

 
4,228,794

 
5,955,854

Carl G. Trowell
 
2019
 
629,168

 

 
4,999,996

 
802,288

 

 
5,071,499

 
11,502,951

Executive Chairman
 
2018
 
801,600

 
1,202,400

 
3,750,000

 
762,722

 

 
102,007

 
6,618,729

 
2017
 
772,800

 
1,159,200

 
3,750,025

 
1,083,002

 

 
92,236

 
6,857,263

Jonathan Baksht
 
2019
 
533,333

 

 
1,349,997

 
1,001,075

 

 
471,818

 
3,356,223

Executive Vice President and Chief Financial Officer
 
2018
 
510,000

 
637,500

 
1,012,502

 
352,920

 

 
657,544

 
3,170,466

 
2017
 
510,000

 
637,500

 
1,012,515

 
519,792

 

 
412,830

 
3,092,637

Gilles Luca
 
2019
 
456,250

 

 
1,349,997

 
913,200

 

 
622,711

 
3,342,158

Senior Vice President, Chief Operating Officer
 
2018
 
450,000

 
450,000

 
1,012,502

 
311,400

 

 
676,470

 
2,900,372

 
2017
 
450,000

 
450,000

 
1,012,515

 
458,640

 

 
505,375

 
2,876,530

Alan Quintero
Senior Vice President, Business Development
 
2019
 
288,750

 
50,000

 
866,257

 
232,493

 
7,697

 
12,130

 
1,457,327

Michael T. McGuinty
Senior Vice President, General Counsel and Secretary
 
2019
 
501,667

 
175,000

 
1,200,000

 
875,231

 

 
410,758

 
3,162,656

P. Carey Lowe
 
2019
 
620,000

 

 
1,999,988

 
648,954

 

 
439,961

 
3,708,903

Former Executive Vice
President and Chief
Operating Officer
 
2018
 
620,000

 
775,000

 
1,500,006

 
482,670

 

 
732,987

 
4,110,663

 
2017
 
620,000

 
775,000

 
1,500,027

 
710,892

 

 
559,812

 
4,165,731

John S. Knowlton
Former Senior Vice President, Technical
 
2019
 
171,135

 

 
2,288,168

 
430,479

 

 
810,650

 
3,700,432

____________________  

54



(1) 
The amounts disclosed in this column include amounts voluntarily deferred under the Ensco Savings Plan, the 2005 Ensco Supplemental Executive Retirement Plan (referred to collectively, along with the Ensco Supplemental Retirement Plan, as the "SERP" in the Executive Compensation tables below as disclosed in the Non-qualified Deferred Compensation Table and related footnotes) and the Rowan Companies, Inc. Savings & Investment Plan.
Mr. Trowell's base salary is denominated in pound sterling ("GBP"). However, for disclosure purposes, his annual base salary was converted to U.S. Dollars ("USD") using the exchange rate of 1.277, 1.336 and 1.288 for 2019, 2018 and 2017, respectively, which represents the average exchange rate over such years.

(2) 
The amounts disclosed in this column consist of the discretionary bonus adjustments approved for Messrs. Quintero and McGuinty in 2019 and the retention awards that vested on 31 December 2018 and 2017 and were paid in January 2019 and 2018, respectively, for the other executives.  Mr. Trowell's retention awards are denominated in GBP. However, for disclosure purposes, his retention award of £900,000 was converted to USD using the exchange rates of 1.336 and 1.288 for 2018 and 2017, respectively.

(3) 
The amounts disclosed in this column represent the aggregate grant date fair value of restricted share awards, restricted share units and TSR performance units granted in 2019, 2018 and 2017 as follows:
 
Year
 
Restricted
Share Awards/Units
($)
 
Performance Unit
Awards
($)
 
Total
($)
Carl G. Trowell(a)
2019
 
2,499,996

 
2,500,000

 
4,999,996

 
2018
 
2,500,000

 
1,250,000

 
3,750,000

 
2017
 
2,500,025

 
1,250,000

 
3,750,025

Jonathan Baksht
2019
 
674,997

 
675,000

 
1,349,997

 
2018
 
675,002

 
337,500

 
1,012,502

 
2017
 
675,015

 
337,500

 
1,012,515

Gilles Luca
2019
 
674,997

 
675,000

 
1,349,997

 
2018
 
675,002

 
337,500

 
1,012,502

 
2017
 
675,015

 
337,500

 
1,012,515

Alan Quintero(b)
2019
 
866,257

 

 
866,257

Michael T. McGuinty
2019
 
600,000

 
600,000

 
1,200,000

P. Carey Lowe(c)
2019
 
999,988

 
1,000,000

 
1,999,988

 
2018
 
1,000,006

 
500,000

 
1,500,006

 
2017
 
1,000,027

 
500,000

 
1,500,027

John S. Knowlton(d)
2019
 
1,038,168

 
1,250,000

 
2,288,168

(a) 
Under his 2019 employment agreement, Mr. Trowell agreed to forfeit all outstanding performance unit awards and the 2019 shares awards granted to him in exchange for a payment of $5,000,000 upon the closing of the Rowan Transaction.
(b) 
The restricted share units granted to Mr. Quintero are considered a supplemental equity award that was granted in exchange for the termination of his Rowan Change in Control Agreement.
(c) 
In accordance with his 2019 separation agreement, Mr. Lowe forfeited all of his outstanding restricted share awards, share units and performance unit awards upon termination of employment with the Company.
(d) 
In accordance with his 2019 separation agreement, Mr. Knowlton's 2019 restricted share units accelerated on a pro-rata basis (based on the portion of the vesting period he was employed) and his 2019 performance unit awards accelerated on a pro-rata basis (based on the portion of the performance period he was employed and assuming target achievement of the applicable performance awards). Additionally, his 2017 and 2018 restricted share awards fully vested and his 2017 and 2018 performance unit awards fully vested at the target amount. Payment for the accelerated performance unit awards was made on Mr. Knowlton's separation date. In accordance with applicable SEC reporting requirements, the aggregate incremental fair value of the modified awards as of the modification date, as well as the full grant date fair values of Mr. Knowlton's restricted share awards, share units and performance unit awards granted during 2019, are both included above in the Summary Compensation Table. The total portion of such amounts attributable to the modification of Mr. Knowlton's awards were as follows:

55



 
Restricted Share Awards/Units
 
Performance Unit Awards
 
Total
John S. Knowlton
$
438,168

 
$
650,000

 
$
1,088,168

Grant date fair value for restricted share units and TSR performance unit awards accounted for as equity awards are measured using the market value of our shares on the date of grant and the estimated probable payout on the date of grant, respectively, as described in Note 10 to our 31 December 2019 audited consolidated financial statements included in our annual report on Form 10-K filed with the SEC on 21 February 2020. If the maximum level of payout is achieved under the 2019 Relative TSR performance unit award grants, the aggregate grant date fair value of such awards would be as follows:
 
 
Maximum Payout
Carl G. Trowell
 
$
5,000,000

Jonathan Baksht
 
$
1,350,000

Gilles Luca
 
$
1,350,000

Michael T. McGuinty
 
$
1,200,000

P. Carey Lowe
 
$
2,000,000

John S. Knowlton
 
$
1,200,000

The TSR performance unit awards granted in 2017, 2018 and 2019 will be settled in cash. For information on the payout of the 2017-2019 performance units, see "Payout of 2017-2019 Performance Awards" within Compensation Discussion & Analysis above.
 
(4) 
The amounts disclosed in this column represent bonuses earned for the 2019, 2018 and 2017 plan years pursuant to the ECIP. Bonuses were paid during the following year based upon the achievement of pre-determined financial, safety performance, downtime and strategic team goals during the year.

In 2019, the amounts disclosed in this column also include the payout of the relative ROCE component of the performance awards granted in 2017. The components of the 2019 amounts are as follows:
 
2019 ECIP
 
2017 Relative ROCE Payout
 
Total Value Earned
Thomas P. Burke
$
882,367

 
$

 
$
882,367

Carl G. Trowell
$
802,288

 
$

 
$
802,288

Jonathan Baksht
$
515,075

 
$
486,000

 
$
1,001,075

Gilles Luca
$
427,200

 
$
486,000

 
$
913,200

Alan Quintero
$
232,493

 
$

 
$
232,493

Michael T. McGuinty
$
443,231

 
$
432,000

 
$
875,231

P. Carey Lowe
$
648,954

 
$

 
$
648,954

John S. Knowlton
$
130,479

 
$
300,000

 
$
430,479


For information on the payout of the 2019 ECIP, see "Actual 2019 Performance" within the "2019 Short-Term Incentive Plan" section disclosed Compensation Discussion & Analysis above.

Mr. Trowell's ECIP bonus award is denominated in GBP. However, for disclosure purposes, his ECIP bonus award was converted to USD, using the exchange rate of 1.277, which was the average rate during 2019.
The Compensation Committee administered the ECIP bonus awards for 2019 by reference to pre-established performance measures and goals. The threshold, target and maximum estimated possible payouts for our NEOs for the 2019 plan year are included in the "Grants of Plan-Based Awards Table."

(5) 
The amounts disclosed in this column represent the aggregate increase in the actuarial present value of accumulated retirement plan benefits. See the "Pension Benefits Table" and "Potential Payments Upon Termination" section and related disclosures for further information regarding NEO retirement benefits.

(6) 
See the "All Other Compensation Table" below.

56



All Other Compensation Table

The table below summarises overseas allowances, premiums paid for group term life insurance, contributions to various benefit plans we sponsor and certain other payments described below for the fiscal year ended 31 December 2019:
All Other Compensation Table
For the Year Ended 31 December 2019
Name
 
Overseas
Allowances(1)
 
Group
Term Life
Insurance(2)
 
Defined
Contribution
Savings
Plans(3)
 
SERP(4)
 
Dividends
on
Share
Awards(5)
 
Payment in Lieu of Profit Share/Match(6)
 
Other(7)(8)(9)(10)
 
Total
Thomas P. Burke
 
$
449,851

 
$
973

 
$

 
$
23,750

 
$

 
$

 
$
3,754,220

 
$
4,228,794

Carl G. Trowell
 
$

 
$
628

 
$

 
$

 
$
39,413

 
$
31,458

 
$
5,000,000

 
$
5,071,499

Jonathan Baksht
 
$
417,620

 
$
1,128

 
$
13,542

 
$
14,104

 
$
9,695

 
$

 
$
15,729

 
$
471,818

Gilles Luca
 
$
565,860

 
$
1,025

 
$
19,000

 
$
25,375

 
$
10,451

 
$

 
$
1,000

 
$
622,711

Alan Quintero
 
$

 
$
759

 
$
7,190

 
$

 
$

 
$

 
$
4,181

 
$
12,130

Michael T. McGuinty
 
$
349,555

 
$
1,119

 
$
49,000

 
$

 
$
9,271

 
$

 
$
1,813

 
$
410,758

P. Carey Lowe
 
$
378,403

 
$
1,034

 
$
19,500

 
$
17,000

 
$
15,629

 
$

 
$
8,395

 
$
439,961

John S. Knowlton
 
$
20,221

 
$
338

 
$
8,182

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